Articles Posted in Business Law

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baltimore-city-hall-1482793__340-300x205Montclair State University has spent the last decade or so trying to obtain approval from the County of Passaic and the City of Clifton to construct a roadway which would intersect with a county road. Both the County and the City raised concerns about the proposed development and Montclair State made significant efforts in an attempt to address those concerns. In 2014, Montclair State submitted an application to Passaic County for a permit to install traffic controls at the intersection.

Montclair State did not seek permission from Clifton or Clifton’s Land Use Board based upon belief that, as a state organization, it was not subject to local regulations. Montclair State asserted this position largely based upon the 1972 New Jersey Supreme Court case of Rutgers v. Piluso.

The question in the Rutgers case was whether Rutgers University was subject to zoning ordinances of the town where it was located, Piscataway. Piscataway had an ordinance which restricted the number of matriculating students’ “family dwellings” Rutgers could have. When Rutgers sought to build more, the town denied the request, citing the ordinance. Rutgers then brought a suit seeking a determination from the court that Rutgers was not subject to local zoning ordinances because it was an instrumentality of the State of New Jersey.

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New Jersey has been trying to legalize sports betting for years. One of the primary hurdles for that legalization has been the federal Professional and Amateur Sports Protection Act (PASPA).  That law, enacted by Congress in 1992, make it unlawful for a government entity to authorize, operate, etc., gambling on competitive games in which athletes participate.  PASPA – also known as the Bradley Act – excluded Oregon, Delaware, Montana, and Nevada from its sports betting prohibitions. New Jersey (and any other state which had licensed casino gambling) had a 1-year window to pass laws permitting sports betting.  However, New Jersey did not pass such a law within that window of time.

Later, in 2011, New Jersey voters approved an amendment to the state constitution to permit the legislature to create laws to permit sports gambling. (Sports gambling would still not be permitted for college sporting events taking place in the State of New Jersey or involving a New Jersey team.)

In 2012 the first Sports Wagering Act was introduced to permit betting on sports at racetracks and casinos.  That Act was challenged by virtually all major sports associations (NFL, MLB, NHL, etc.) and ultimately struck down by the District Court as violating PASPA.

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Enforceable contracts are the bedrock of a strong economy. If contracts were not enforced, parties could not rely on the other side performing because there would be no remedy if they breached. Therefore, commerce would break down. Enforceable contracts are so important to the economy, in fact, that the freedom to contract is included in both the New Jersey and United States Constitutions. Before a contract can be enforced, however, the parties and the reviewing court must figure out what the contract means. When the terms are clear this normally isn’t a problem. However, when the contract is ambiguous, or even just a part of it is unclear, the question becomes what evidence may be admitted to determine the meaning and intent of the contract.

As I’ve written earlier, New Jersey courts generally adhere to the “parole evidence rule,” which holds that when there is a clear, unambiguous contract, extrinsic, or external, evidence beyond the four walls of the contract is inadmissible to prove what the contract means. However, in New Jersey business law, the exceptions come close to swallowing the rule. Indeed, the New Jersey Supreme Court held as far back as 1953, in the case of Atlantic Northern Airlines v. Schwimmer, that all evidence is relevant if it will assist the trier of fact in determination what the parties to a contract intended and what the contract means – even if that evidence is extrinsic.

The question, then, is what sort of extrinsic evidence is admissible? In the case of commercial contracts, one source of evidence is custom and usage.

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McLaughlin & Nardi’s New Jersey construction attorneys represent owners, contrhouse-construction-3370969__340-300x197actors and building suppliers in the prosecution and defense of construction lien claims.

As discussed in McLaughlin & Nardi’s overview of construction liens, they can be powerful tools for construction contractors, subcontractors, and suppliers who are experiencing difficulties in getting paid for the work that they have performed.

However, when considering whether to proceed with filing a construction lien for either a commercial or residential project, it is important to know that the contractor (“claimant”) act promptly once it starts to experience payment issues.

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laptop-3175111__340-300x200New Jersey Courts have followed the Parole Evidence Rule since at least 1882.  The Parole Evidence Rule holds that outside (or “extrinsic”) evidence is not allowed to alter the terms of a contract – in other words, the Parole Evidence holds that, the meaning of a contract is contained within its own four walls.  Unlike most rules with the word “evidence” in it, the Parole Evidence Rule is not actually part of the Rules of Evidence.  In fact, it is not really an evidence rule at all.  Rather, it is a substantive rule of law which holds that once the parties sign a contract, their prior negotiations are irrelevant because they have selected the terms of their agreement.

The first requirement for the Parole Evidence Rule to be invoked is that there must be a written contract – the Parole Evidence Rule only applies to agreements which have placed into a written contact.  Second, the written contract must be intended as the parties’ final agreement.  While this may seem self-evident, in the early stages of commercial transactions parties often use “letters of intent” which are not intended as the final agreement, but only as the broad outlines of how the parties foresee their eventual agreements turning out.  Finally, the contract must be a “fully integrated” agreement.  This means that the contract must cover all parts of the transactions, not just some elements; the Parole Evidence Rule does not bar extrinsic evidence in the interpretation of “partially integrated” contracts.

Limitations on Application of the Parole Evidence Rule

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block-chain-2853046__340-300x134Our attorneys represent people and businesses in all aspects of contract law, including contract negotiations, drafting, review and contract litigation.  One of the more complex areas of contract law if the interplay of contract and tort law when fraud and contracts intersect.  While this issue is complex, there are several basic rules and principles.

The Economic Loss Doctrine – Fraud in the Performance of a Contract

New Jersey contract law adheres, if somewhat loosely, to the “economic loss doctrine.”  What this rule says is that after two parties enter into a contract governing their relationship, their remedies for economic loss are limited to breach of contract.  They cannot sue for torts (civil wrongs) such as fraud.  Thus, as a hypothetical example, after a contract is signed for ABC Company to pay XYZ, LLC $10,000 for the manufacture and delivery of ten motors, if XYZ takes the money and then keeps telling ABC that the motors are coming “soon” knowing full well it is never going to deliver, ABC is limited to suing XYZ for breach of contract when the motors aren’t delivered.  ABC cannot sue for fraud in the performance of the contract.  This is the heart of the economic loss doctrine.  The practical difference is that punitive damages are available if a party is found guilty of fraud, but punitive damages are not available for breach of contract.

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signature-3113182__340-300x200What is a Restrictive Covenant?

A restrictive covenant is a contractual agreement in which one party receives something of value in exchange for a promise not to engage in a particular type of behavior.  Restrictive covenants can bind people or businesses.

What Types of Restrictive Covenants Are There?

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bar-2832543__340-259x300When you purchase a liquor license in New Jersey, as a Buyer you must be approved by the State of New Jersey Alcoholic Beverage Commission and the Municipality where the business operates.  This process is detailed and time consuming.  it must be started as soon as possible by the Buyer.  You will need to obtain a Person to Person Transfer of the liquor license.  Unless and until the municipality issues a resolution approving of the transfer of the liquor license, the current license holder must operate the business.

In order to be approved, the applicant must meet the following requirements:

a)      18 years of age or older;

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building-2603161__340-300x200The New Jersey Supreme Court recently issued an important decision in the case of Palisades At Fort Lee Condominium Association, Inc. v. 100 Old Palisade, LLC, defining when the statute of limitation will begin to run  in construction defect litigation.  This decision is now the defining law on the timeliness of construction lawsuits.

Background

The devil is in the details, especially in construction law.  These are the facts in this one.

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Wage and Hour Laws Governing New Jersey Workplacesjustice-2756939__340-275x300

The Fair Labor Standards Act is the federal law which, along with the Wage and Hour Division of the United States Department of Labor’s regulations found in the Code of Federal Regulations, governs overtime and minimum wage requirements.  The Fair Labor Standards Act (known as the “FLSA”) requires that most employees (known as “non-exempt” employees, or those who are not exempt from overtime requirements) be paid “time and a half” for all hours they work over forty in any particular week.

In an action for violating the F