Timing May Be Everything In Breach Of Warranty Claims

In the wake of the recent recalls and warranty campaigns, suppliers should bear in mind the threshold statute of limitations defense that they may have to any attempts by the OEMs to recover against them for costs for issues that the OEMs may have known about for years, but failed to act upon. An OEM seeking to recover against a supplier for an alleged breach must clear two timing hurdles: (1) warranty eligibility, meaning that the claim falls within the applicable warranty period; and (2) timeliness under the UCC's four-year statute of limitations period. The expiration of the four-year statute of limitations period may be an absolute defense to certain breach of contract and breach of warranty claims.