Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Affirmative Defense in New Jersey Breach of Contract Lawsuit

Author: Robert E. Levy

Date: July 4, 2013

Key Contacts

Back

In many breach of contract cases, the breaching party can reduce or eliminate its liability by arguing that the circumstances surrounding the agreement justified the breach. These are referred to as an “affirmative defense” and must generally be raised in the defendant’s answer and proven at trial. 

In a recent case, the Appellate Division of the New Jersey Superior Court clarified that defendants must plead frustration of purpose as an affirmative defense in order to avoid liability when a supervening event makes a defendant’s obligations impractical or impossible to perform.

The Facts of the Case

JB Pool Management v. Four Seasons at Smithville Homeowners Association Inc. involved a contract for pool-related services between a pool management company and a homeowner’s association. During the term of the contract, the condominium’s indoor pool was closed for several months due to mold, and the parties disagreed over whether fees were due under the agreement during this time.

While J.B. Pool Management raised a number of defenses to the resulting breach of contract lawsuit, it did not assert frustration of purpose. Rather, the trial judge raised it during the process of instructing the jury as a more suitable alternative to a proposed charge of impossibility of performance. The jury ultimately found the association was not liable for the four months of disputed fees.

On appeal, J.B. Pool Management raised a number of grounds for reversal, including that the trial court improperly and prejudicially charged the jury on the doctrine of frustration of purpose, despite the fact that Four Seasons had not raised the doctrine as an affirmative defense in its pleadings.

The Court’s Decision

The Appellate Division concluded that litigants seeking to invoke the doctrine of frustration of purpose to avoid their contractual duties generally should plead the doctrine as an affirmative defense. However, the panel acknowledged that because New Jersey law was previously unclear on the issue, it would be unfair to impose the requirement on J.B. Pool Management retroactively.

“Instead, we hold that, in future cases, the defense of frustration of purpose, or impossibility of performance, be raised in a responsive pleading, unless exceptional circumstances excuse that oversight,” the court held.

The court further found that J.B. Pool Management was prejudiced by the late notice of the frustration of purpose affirmative defense and reversed the dismissal of the breach of contract claim. It remanded the case for additional discovery focused on that defense, followed by a new trial.

If you have any questions about this case or would like to discuss the legal issues involved, please contact me, Robert Levy, or the Scarinci Hollenbeck attorney with whom you work. 

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Corporate Transactions: Best Practices for Successful Deals post image

Corporate Transactions: Best Practices for Successful Deals

Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]

Author: Dan Brecher

Link to post with title - "Corporate Transactions: Best Practices for Successful Deals"
How to Conduct a Fair and Legal Employee Termination in 2025 post image

How to Conduct a Fair and Legal Employee Termination in 2025

Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]

Author: Angela A. Turiano

Link to post with title - "How to Conduct a Fair and Legal Employee Termination in 2025"
Admin Dissolution for Annual Report: What You Need to Know post image

Admin Dissolution for Annual Report: What You Need to Know

While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]

Author: Dan Brecher

Link to post with title - "Admin Dissolution for Annual Report: What You Need to Know"
What Is Antitrust Litigation Law? post image

What Is Antitrust Litigation Law?

Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]

Author: Robert E. Levy

Link to post with title - "What Is Antitrust Litigation Law?"
Dissolving Your Business: Essential Legal Steps to Protect Your Interests post image

Dissolving Your Business: Essential Legal Steps to Protect Your Interests

If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]

Author: Christopher D. Warren

Link to post with title - "Dissolving Your Business: Essential Legal Steps to Protect Your Interests"
The Role of Corporate Restructuring in Mergers & Acquisitions post image

The Role of Corporate Restructuring in Mergers & Acquisitions

Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]

Author: Dan Brecher

Link to post with title - "The Role of Corporate Restructuring in Mergers & Acquisitions"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!