by: Peter J. Gallagher (@pjsgallagher)
In a recent unpublished decision, the Law Division refused to enforce a purported personal guarantee in a commercial contract. Individuals and entities that include such guarantees in their contracts with customers should read the decision (or just continue reading below).
In Century Star Fuel Corp. v. Jaffe, defendant entered into a contract with plaintiff whereby defendant obtained a line of credit from plaintiff that defendant could use to purchase heating oil from plaintiff. The one-page contract, which was prepared by plaintiff, contained a single signature line for defendant’s president to sign on behalf of defendant. It also contained what the court described as “boilerplate language” providing the following: “Applicant . . . agrees and acknowledges that the person who signs this Application has the Authority to do so; and Personally Guarantees all present and future extensions of credit.” Defendant was identified as the “Applicant” in the signature line. Plaintiff alleged that this clause was unambiguous and rendered defendant’s president personally liable for defendant’s debts. Defendant disagreed and argued that the clause was unenforceable because its president never intended to be personally bound. Both parties moved for summary judgment. The trial court sided with defendant.
Continue reading “In Life, There Are No [Personal] Guarantees (Especially When They Are Buried In An Ambiguous Provision Of A Contract)”
by: Matthew J. Schiller
In Shakoor Supermarkets, Inc. v. Old Bridge Township Planning Board, the Appellate Division concluded that an applicant proposing to construct a 150,000 square foot Wal-Mart Superstore need not specify that the occupant of the retail space would be a Wal-Mart. Rather, the Appellate Division deemed that the published public notice gave an accurate description of the property’s proposed use under the application and that technical details need not be provided.
The objector challenged the Planning Board approval citing Perlmart of Lacey, Inc. v. Lacey Twp. Planning Bd., 295 N.J. Super. 234, 234 (App. Div. 1996), in which the Appellate Division deemed a public notice for a proposed K-Mart insufficient. The Appellate Division in Perlmart stated that “while the notice informed that certain variances and minor and major site plan approvals were being sought ‘for the creation of commercial lots’ in a commercial zone, it does not tell the public of the nature of that use, i.e., a conditional use K-Mart shopping center.” The Appellate Division disagreed with the objector in Shakoor, stating that Perlmart did not hold that it was necessary for the applicant to actually identify K-Mart as the retailer in its application, but rather, that a notice should provide a “common sense description of the nature of the application, such that the ordinary layperson could understand its potential impact upon him or her.” The notice need not be “exhaustive” to support this standard.
The notice at issue in Shakoor identified the proposed use as “a main retail store of 150,000 s.f.” The Appellate Division concluded that the description adequately informed laypersons that a major “big box” store was proposed for the site and alerted them to possible concerns, such as traffic, commonly associated with those stores, and that such concerns were expressed at the hearings by members of the public. Further, the Appellate Division concluded that the multiple proposed retail uses did not constitute a legitimate cause for “heightened concern” to the public that would require a more in depth description beyond those associated with a 150,000 square foot retail store.
Therefore, so long as a proposed use is described in terms that permit ordinary laypersons to understand how the property will be used and sufficiently alerted as to its potential impact upon him or her, it will likely be deemed sufficient.