In a major ruling issued March 20, 2026, the North Carolina Supreme Court held that a contractual one-year limitation period can bar a claim under the Unfair and Deceptive Trade Practices Act. For defendants, Warren v. Cielo Ventures Inc. is an important decision given that the UDTPA ordinarily carries a four-year statute of limitations (and UDTPA claims are the bane of defendants). Businesses should consider updating their contracts with a similar provision to the one used in this case.
The Facts
The underlying dispute arose after plaintiffs contracted with a remediation company following water damage to their home. The service agreement included a one-year contractual limitation provision, printed in capital letters, providing that no action relating to the subject matter of the contract could be brought more than one year after the claimant knew or should have known of the cause of action. Plaintiffs later alleged that the company never initiated the remediation work, that mold spread through the home, and that the home ultimately had to be demolished.
Although plaintiffs knew of the alleged wrongful conduct in July 2017, they did not file suit until July 2021. Their claim was brought under the UDTPA, which has a four-year statute of limitations under North Carolina law (N.C.G.S. § 75-16.2). The trial court granted summary judgment for the defendant based on the contractual limitation provision. The Court of Appeals reversed, holding that enforcing a shortened contractual limitation period against a UDTPA claim violated public policy.
The Ruling
The North Carolina Supreme Court reversed the Court of Appeals and held that the one-year contractual limitation was enforceable. The court emphasized that statutes of limitation reflect public policy choices made by the legislature, not the courts. It further explained that North Carolina has long recognized that parties may agree to shorten the time for bringing claims arising out of a contract, so long as two conditions are met:
1. No statute forbids the shorter period.
2. The shortened period is reasonable.
That framework mattered here. While the UDTPA provides a four-year statute of limitations, the Supreme Court found that Chapter 75 does not prohibit parties from agreeing to a shorter limitations period. If the legislature had intended to forbid contractual shortening of the limitations period for UDTPA claims, it could have said so, the Supreme Court reasoned. Because the statute contained no such prohibition, and because plaintiffs did not meaningfully argue that the one-year period was unreasonable, the contractual provision controlled.
The court’s reasoning was also grounded in freedom of contract. As the opinion put it, the legislature may impose reasonable restrictions on the right to contract, but absent such a restriction, “freedom of contract is the general rule and restraint the exception.” Here, the legislature had not prohibited “downward adjustment of the limitation period for UDTPA claims,” so the court enforced the parties’ agreement as written.
The Moral
This is a significant decision for defendants. UDTPA claims are often among the most troublesome claims to face in North Carolina litigation, primarily because of the potential for an award of treble damages and attorneys’ fees. The four-year statute of limitations under the UDTPA is also longer than other tort claims like the three-year statute for fraud. Warren provides a potential tool for contractually shortening that exposure. A properly drafted contractual limitation provision may now allow businesses to reduce the time for bringing a Chapter 75 claim from four years to one.
That makes this ruling especially important for companies that regularly contract with customers, vendors, service recipients, or other counterparties in North Carolina. Many businesses would be well advised to review their standard contract forms and consider whether they should also include a one-year limitations provision covering claims that relate to the subject matter of the agreement, regardless of the form of those claims.
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