News & Noteworthy

Authored - NJ Contract Law Update - Some Types of Contracts Are Sui Generis
SEPTEMBER 24, 2012 | Windels Marx - Commercial Litigation

Do v. Nguyen, 2012 WL3628784 (N.J.App.Div. August 24, 2012), is of interest to the contract-law practitioner primarily because it highlights the fact that certain types of agreements are sui generis. By this I mean that in order to fully understand such contracts--and the law pertaining to interpretation thereof--additional bodies of laws and statutes must be (1) consulted and (2) deemed to have importance essentially equal to the 'words on paper'.

Do involved two such specialized legal regimes:

  1. Landlord-tenant; and,
  2. Partnership.

As to such 'specialized' agreements, there are additional bodies of law (common-law and statutory) to consult beyond the wording of the document itself--both to give meaning to the wording (a meaning developed over centuries, in some instances), and to determine statutory obligations against which the documents should be viewed. For example, parties are deemed to have contracted with knowledge of existing law; statutory requirements can sometimes be 'read into' contracts; and contractual provisions may be invalid in light of statutory or common-law concerns.

Do specifically involved a commercial tenancy. (With residential tenancies, there are even more overlays of the types suggested.) Regarding the lease, the Court first said, "New Jersey has been a leader in its recognition that the modern lease should be construed in accordance with principles of contract law"1 --and then (nonetheless) delved into realty law which, while more 'modern' than the hoary real-estate jurisprudence referred to in the quoted passage above, did set forth some unique principles to be considered as background when reading and interpreting a commercial lease.

In terms of partnership, such a relationship is many things--but at its core, it is an explicit or implicit agreement between two or more parties about their business relationship. In the ruling on same, the Court referenced the Uniformed Partnership Act, N.J.S.A. 42:1A-1 et seq., as well as common-law regarding "fiduciary duties" owed between members of the partnership: the treatment of expenses and liabilities; and the right to an "accounting".

While Do may be illuminating in numerous regards relating to the underlying issues themselves, it is, first and foremost, instructive in indicating to the practitioner that there may be specialized areas of jurisprudence and statute applicable to various different types of contracts; so that merely 'reading the contract' would not give the full flavor of the intent and enforceability of the document. This sort of issue identification/recognition is important at all stages; including drafting, negotiation, advice, performance and litigation.

Contact & Legal Disclaimer

Clark Alpert is the author of Guide to New Jersey Contract Law, published by the New Jersey Institute for Continuing Legal Education, originally published in 2007 and updated in November 2011. His updates on New Jersey contract law are based in recent issues and practical methods for addressing similar situations in your practice or business. They are not intended to serve as legal advice. Clark welcomes your questions and comments.

1 Citations omitted.


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