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College of Notre Dame of Maryland3/9/2000
gainst an architectural firm for breach of contract and malpractice. The action arose out of the architectural firm's services rendered in connection with the re-roofing of certain schools. Id. at 161. Again, the provision in question was substantively similar to the one before us. The New York court held that the parties were free to contract with respect to the time for accrual of a cause of action and that such provisions were enforceable in the absence of duress, fraud, or misrepresentation. Id. at 161-62.
In Keiting v. Skauge, 543 N.W.2d 55 (Wis. Ct. App. 1995), the Wisconsin Court of Appeals dealt with a contractual provision that shortened the period of limitations and specified the time for accrual of a cause of action. A homeowner sued a home inspection company, alleging that the company had failed to report defects in the home. Id. at 567-68. By statute, Wisconsin recognizes the right of parties to contract for a shorter period of limitations than that provided by Wisconsin law. In Kieting, the court perceived no reason why parties should be able to contract for a shorter limitations period but not be able to assign a date from which the period of limitations would run. Id. The court found that "where parties freely and voluntarily wish to alter that state of affairs, public policy supports their right to do so." Id. at 567.
In light of the strong public policy in favor of freedom to contract, the recognized ability of parties to agree to a shorter period of limitations, and the construction by other jurisdictions of similar accrual clauses, we conclude that the provision in the parties' contracts that alters the normal rules governing the time for accrual of causes of action is enforceable.
We do not purport, by virtue of our holding, to address the validity of contractual suit limitations in all cases. In this case, there is no suggestion of duress, fraud, misrepresentation, or unequal bargaining power. The result might well be different in those circumstances. Additionally, our holding is limited to a suit for repair costs by a contracting party. We are not addressing claims for damages to person or property sustained by a contracting party or for contribution/indemnity by a contracting party as a result of an action brought by a third party against the contracting party.
There is no dispute that appellant failed to file suit against appellees within three years of the date of substantial completion or the date of the issuance of the final certificate for payment for the project. Accordingly, appellees are entitled to summary judgment on appellant's claims based on the statute of limitations if appellees are entitled to rely on that defense.
F. Consultant's Liability
Assuming the validity of the accrual provision, appellant further argues that, because there was no direct contractual relationship between appellant and appellees, the circuit court erred in holding that appellees could rely on it. Appellees, in countering, rely on the theories of third party beneficiary, estoppel, and assignment. We turn our attention to those theories, but we first observe that we are unaware of any reported decision in the country that is squarely on point.
1. Third Party Beneficiary
Appellees argue that appellant is a creditor beneficiary of the contract between the architect and Morabito Consultants, Inc. because performance of the latter's promises satisfied the duty of the architect to the owner to provide engineering services. As such, Morabito Consultants, Inc. may raise in defense to the appellant's claims all of the contract provisions in the same manner that those provisions would be available in a similar a
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