You don’t always need a binding contract to win a business lawsuit. In some cases, New Jersey courts will impose liability even though some of the essential elements of a contract are missing. These equitable remedies are based on “fairness,” and they are intended to redress the wrong suffered from the breaching party's actions when traditional legal remedies are not available.
Forming a Binding Contract
To start, it is always advisable to have a written contract that details the contract rights and remedies that are available if one party fails to perform. Under New Jersey contract law, the following elements are required to form a binding contract:
- Meeting of the minds: the parties reached an agreement to (do what is alleged).
- Offer and acceptance: one party communicated a willingness to enter into the agreement and the other party gave some outward indication that the agreement was accepted.
- Consideration: each party gave or promised something of value to the other.
- Certainty: the terms of the agreement were reasonably certain.
Of course, we don’t live in a perfect world, and business deals sometimes fall short of satisfying the above requirements. The good news is that you can often still file a New Jersey lawsuit to enforce the contract.
For instance, a contract may still be enforced even if there are missing terms. If essential terms are either agreed upon or may be inferred from conduct or context, a court can still enforce a contract even if there are missing non-essential terms In such cases, the court will often imply a term when the parties fail to do so. Additionally, the court may imply a term if it’s necessary to give a contract a reasonable construction. For instance, if a contract does not state its duration, the court may imply that the contract is to be performed or continue for a reasonable time, which may be determined based on the type of contract that it is, the past dealings of the parties, etc.
Equitable Remedies Under New Jersey Contract Law
New Jersey also recognizes several equitable remedies that can be used to enforce an otherwise unenforceable contract. Below are the most common examples:
- Promissory Estoppel: In some cases, a contract lacking consideration may be enforced, provided that the other party made a promise and you reasonably relied on that promise. Specifically, promissory estoppel requires you (the plaintiff) to show the following: the defendant made a clear and definite promise; the defendant expected that the promise would be relied upon; the plaintiff did reasonably rely on the promise; and the plaintiff’s reliance on the promise caused the plaintiff to suffer a definite and substantial detriment.
- Quantum Meruit: Even when the words and actions of the parties are insufficient to establish an intention to agree upon contract terms, a quasi-contract may be imposed by the law for the purpose of bringing about justice without reference to the intentions of the parties. To recover under the principle of quantum meruit, you must be able to prove all of the following factors: that plaintiff conferred a benefit on the defendant; that plaintiff conferred said benefit with a reasonable expectation that defendant would pay for it; and that the benefit was conferred under circumstances that should have put the defendant on notice that plaintiff expected to be paid.
- Unjust Enrichment: The doctrine of unjust enrichment is based on the principle that a person shall not be allowed to enrich himself unjustly at the expense of another. To recover under a theory of unjust enrichment, the plaintiff must show the following: that the defendant received a benefit; that retention of that benefit without payment would be unjust; that the plaintiff expected remuneration from the defendant at the time he conferred the benefit; and that a reasonable person in the defendant’s position would have expected to provide remuneration for the benefit.
In order to convince a New Jersey court to order one of the above equitable remedies, you will need to provide evidence. In order to convince a New Jersey court to order one of the above equitable remedies, you will need to provide evidence. So, when there is no written contract, you will need documentation to back up your claims, such as email correspondence, written documents, invoices, or witness testimony.
If you have any questions, please contact us
If you have any questions or if you would like to discuss the matter further, please contact me, Peter Yarem, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.