Jerry and Simon signed a contract so that Jerry could purchase all of Simon’s restaurant equipment for one price after Simon closes his restaurant next month.

The Question: Jerry and Simon signed a contract so that Jerry could purchase all of Simon’s restaurant equipment for one price after Simon closes his restaurant next month. The contract contains a provision that states Jerry has one year from the purchase date to file a suit relative to the purchase. After the year is up, Jerry forfeits the right. What kind of contract clause is this?

Answer: Statute of limitations

The statute of limitations states the time frame in which a party can file a lawsuit relative to the contract.

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