Every legal claim a party can bring in court has a statute of limitations, a period of time in which the claim must be brought. The purpose and effect of statutes of limitations is to protect defendants—people who can be sued.
In rare circumstances, even after a statute of limitations has run and a party has lost its rights to sue, the other party can revive the claim. This can occur, for example, with contract claims. Under Idaho law, the statute of limitations for written contracts is five years, and for oral contracts, it is four years. However, if a party to a contract makes a written and signed “acknowledgment” or makes a payment of principal or interest on the contract, the other party’s right to sue under the contract is renewed. The statute of limitations starts over.
Idaho courts have found that the following acts renew a contract and reset the statute of limitations:
- Partial payment on a note (Thomson v. Sunny Ridge Vill. P’ship).
- Payment of interest on a mortgage debt (Brown v. Deck).
- A signed writing agreeing to pay interest due on a promissory note (Kelly v. Leachman).
- Written approval by a debtor of the lender’s report showing advances and loans the debtor had not yet repaid (Cummings v. Langroise).
Not every written statement that recognizes a contract can be construed as an acknowledgement that resets the statute of limitations. For example, in Reding v. Reding, a case heard by the Idaho Supreme Court, a married couple sued a partnership to recover money it lent. The debtor filed a motion for partial summary judgment, claiming the statute of limitations had run, and as part of the court proceedings, the debtor submitted to the court a stipulation recognizing these loans had not been repaid. The Court concluded this stipulation was not an acknowledgement of the debts that, under Idaho law, would reset the statute of limitations. They were only made to simplify court proceedings and clarify undisputed facts.
A signed statement acknowledging a debt must be clear and definite and maybe must show intent to repay the debt. Nonetheless, debtors should be careful when making any written statements concerning old debts; they could potentially revive contractual debts that were barred by the statute of limitations.
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