Borrowing statute

A borrowing statute, in United States law, is a statute under which one state may "borrow" a shorter statute of limitations for a cause of action arising in another state. The purpose of borrowing statutes is to prevent plaintiffs from engaging in forum shopping in order to find the longest available statute of limitations. Such a statute is applied where a plaintiff sues in a state different from the state where the act that is the basis of the lawsuit occurred - for example, if a person was injured in a car accident in state A, but sues the other driver in state B (presuming state B has jurisdiction, usually because it is the driver's home state). The state will usually apply the other state's statute of limitations, so long as it is a shorter statute of limitations than that of the borrowing state. In determining which state is the one in which the cause of action arose, states will apply various choice of law principles, which can be very complicated.

In some states, the borrowing statute will only be applied if the plaintiff was not a resident of that state at the time the cause of action accrued; in others, it will only apply if the defendant was not a resident.

In Virginia^[1] and West Virginia, the borrowing statute applies only to contract actions. If the contract has been breached in another state where it was supposed to have been performed, or validity of the contract is contested in another state where the contract was formed, then Virginia and West Virginia will apply the statute of limitations of the other state, so long as it is shorter than their local statutes of limitations.

References

1. Code of Virginia § 8.01-247.