U.S. District Court Voids 1-year Contractual Limitations Period in J.M. Bullion’s Customer Agreement

In SUK v. JM Bullion, Inc., Case No. 3:22-cv-01085-SB, 2022 WL 10015691 (D. Oregon Oct. 17, 2022), the U.S. District Court for the District of Oregon voided the one-year limitations period for bringing claims in JM Bullion’s terms and conditions and imposed a four-year statute of limitations. This one-year contractual limitation for bringing claims reads as follows:

“You agree that regardless of any statute or law to the contrary, any claim or cause of action arising out of [or] related to this agreement must be filed within one (1) year after such claim or cause of action arises, or forever be barred …”

In finding that the Uniform Commercial Code (“UCC”) applied to JM Bullion’s sale of gold bars because they constituted “goods”[1] as defined in the UCC,[2] the Court applied Section 2-275(1) of the UCC, which reads:

“An action for breach of any contract for any contract of sale must be commenced within four years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.”

This Court construed JM Bullion’s one-year contractual limitations period as violating Section 2-275(1) of the UCC because the word “within,” as used in “within one year after” imposes a filing requirement of less than one-year, and therefore found that JM Bullion’s one-year contractual limitations period was void and the four-year limitations period in Section 2-275(1) applied.  The Court was also of the opinion that JM Bullion’s one-year contractual limitations period would have satisfied Section 2-275(1) had it merely read one-year “and one day.”

It is too soon to determine whether this Court’s strict construction of Section 2-275(1) will withstand further judicial scrutiny because it was so recently decided. But it appears to be inconsistent with the intent of the parties, irrespective of the missing “and one day” language. Clients may want to review one-year limitations periods for bringing claims in their own customer agreements for “and one day” language in the meantime.  

For further guidance on contractual limitations periods for bringing claims, feel free to give us a call at (314)-563-2490.


[1] UCC § 2-105(a) defies “goods” as “all things … which are movable at the time of identification to the contract for sale.”

[2] The UCC has been adopted by all 50 states and the District of Columbia.