Construction Law Insights

M&C Hauling & Constr., Inc. v. Hale, 2018 Va. Cir. LEXIS 114 (Cir. Ct. Fairfax Cnty. June 28, 2018)

In Virginia, a party has five years to bring a claim based on a written contract, but only three years to sue for breach of a verbal or non-written contract. In this case, the sub-subcontractor’s claim was out of time unless certain unsigned documents were considered to be a written contract.

William Hale d/b/a Mulch, Topsoil and Stone (the “General Contractor”) entered into a subcontract with Hauling Unlimited (the “Subcontractor”) for truck hauling services. The Subcontractor then entered into a sub-tier subcontract with M&C Hauling and Construction, Inc. (the “Sub-Subcontractor”) for the same services. The Sub-Subcontractor provided the requested hauling services to Subcontractor and issued written daily sales tickets that listed the number of hours worked on a particular date. Sub-Subcontractor’s daily sales tickets were signed by the General Contractor, but not the Subcontractor. Although Sub-Subcontractor’s hourly rate was not listed on its daily sales tickets, it was later stated in an invoice from Sub-Subcontractor that was billed to the General Contractor.

Alone, the plain language of Virginia’s statutes of limitation for written contracts suggests that a written contract must be signed by the party being charged with its breach. However, the Supreme Court of Virginia in Dixon v. Hassell & Folkes, P.C. stated “an unsigned agreement all terms of which are embodied in a writing, unconditionally assented to by both parties, is a written contract.” 283 Va. 456, 460, 723 S.E.2d 383, 385 (2012). Therefore, Dixon’s definition of a written contract removes the signature requirement for unsigned written agreements, unless a party’s signature is an express condition in the contract.

Here, all terms of the agreement, including the rate and hours worked, were committed to writing in the Sub-Subcontractor’s daily sales tickets and invoice, without any dispute. Although there was no signature anywhere by the Subcontractor, the parties did not make their signatures a condition precedent to the formation of the contract. Using the Dixon Court’s definition of a written contract, the Fairfax Circuit Court determined that the documents were a written contract and Virginia’s five-year statute of limitations for written contracts applied. The lawsuit was not found to be late and the Sub-Subcontractor was allowed to proceed forward with its case.

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