
Robert E. Levy
Partner
201-896-7163 rlevy@sh-law.comFirm Insights
Author: Robert E. Levy
Date: July 4, 2013
Partner
201-896-7163 rlevy@sh-law.comIn 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.
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
Author: Brittany P. Tarabour
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
Author: Christopher D. Warren
Commercial leases can take a variety of forms, which is often confusing for both landlords and tenants. Understanding the different types, especially the gross lease structure, is important when selecting the lease that best suits your needs. One key distinction between lease types is how rent is calculated and paid. This article addresses the two […]
Author: Robert L. Baker, Jr.
Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]
Author: Brian D. Spector
Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]
Author: Dan Brecher
The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]
Author: Brian D. Spector
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
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!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!