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Reference in Second Contract to First Contract May Make First Contract Enforceable
Description For more than four years, a buyer failed to pay for cows that they purchased. The parties then signed a new agreement stating that the amount due was still owed at a new interest rate. The New Hampshire high court held that the second agreement may have been sufficient to keep the first agreement enforceable and thereby kept the statute of limitations running.
Topic Contracts
Key Words Statute of Limitations
C A S E   S U M M A R Y
Facts Purdy agreed to buy 5 cows from Soper. The sales agreement specified that $23,343 would be paid within two months and, if it was not, that an 11% interest rate would be applied to any outstanding balance. After four years, Purdy had not paid Soper. They then signed another agreement stating that the prior balance (including unpaid interest) was due and that an 8% rate of interest would apply henceforth. After two years, no payments had been made. Soper sued. The trial court held that the claim was time barred because the only agreement that mattered was the first agreement, which had been made more than six years before suit was filed. Soper appealed.
Decision Reversed. The statute of limitations does not bar this action if there is "a direct and unqualified admission by a debtor within the statutory period prior to the commencement of the action." The trial court held that the second sales agreement was not an admission of the debt; that is incorrect. The fact that the second agreement did not specifically state, "I will pay Taylor Soper $23,343," does not mean that a jury could not infer that an admission of the original debt was not made in the second agreement. The agreement must contain "terms from which an unqualified promise to pay [the debt] is to be implied." The parties' intent at the time of the second agreement will be determined at trial.
Citation Soper v. Purdy, 740 A.2d 1044 (Sup. Ct., N.H., 1999)

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