News & Noteworthy

Authored - NJ Contract Law Update - A Helpful Guide to Important Contract and Quasi-Contract Issues
MAY 16, 2013 | Windels Marx - Commercial Litigation

Stockroom v. Dydacomp Development Corp. ___ F.Supp.2d__, 2013 WL 1758365 (D.N.J. April 24, 2013), is instructive in numerous regards:

1. It explains that equitable tolling (based upon fraudulent concealment, the most frequent variant thereof) requires:

a. an "over[t] trick[]" or deception, essentially of an intentional type;
b. which constitutes conduct "beyond the original act of wrongdoing" (emphasis in original).

2. Some claims can be tolled by the "discovery" doctrine--rather than by equitable tolling principles such as fraudulent concealment--but such claims do not include "breach of contract claims governed by the Uniform Commercial Code."

3. Claims or transactions within the UCC's four years may or may not be actionable in the face of a limited express warranty.

4. The New Jersey Consumer Fraud Act (CFA) "applies to the sale of merchandise for use in business operations and 'a business entity can be, and frequently is, a consumer in the ordinary meaning of that term'."

5. To have standing, the business must be purchasing the goods "for consumption, not resale."

6. "Heavily negotiated" and unique contracts for consumption may not be within the CFA.

7. While fraudulent concealment, without more, may support a CFA claim, it is not enough to support a common-law fraud count; because in the ordinary commercial transaction, there is no duty to disclose, such as a fiduciary relationship.

The message is that when dealing with contract or quasi-contract issues, it pays to have certain instructive cases such as Stockroom handy as a guide to the practitioner.

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.

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