An Anniversary in New Jersey’s Law of Contracts

On this date in 1956, the Supreme Court decided Friedman v. Tappan Development Corp., 22 N.J. 523 (1956).  Like Newark Publishers’ Ass’n v. Newark Typographical Union, 26 N.J. 419 (1956), decided just one week earlier, Friedman was an opinion by Justice Heher that stated fundamental principles of contract law that continue to be cited today.  But while Newark Publishers was a unanimous opinion, Friedman resulted in a 3-2 split.  Justices Wachenfeld and Burling joined in the majority opinion, while Chief Justice Vanderbilt and Justice Jacobs dissented, without issuing their own opinion.

The contract principles stated in Friedman include that (1) the intent of the parties as expressed in the written contract, not the true intent of either party, controls interpretation of the writing, and (2) “[t]o be enforceable, a contract must be sufficiently definite in its terms that the performance to be rendered by each party can be ascertained with reasonable certainty.”  Justice Heher also discussed the ideas of mutuality of obligation, unilateral contracts, and promissory estoppel, the last of which has since been expanded beyond the parameters that Friedman espoused.  Friedman was also the first Supreme Court case to cite section 90 of the Restatement of Contracts, which has been viewed as a foundation of the promissory estoppel doctrine in general.

The holding of Friedman was that the document at issue, on which plaintiffs sought specific performance in the form of an order compelling the transfer of real property, was in fact a mere option that lacked consideration and was therefore unenforceable.  The majority also concluded that promissory estoppel did not save the day for plaintiffs.

That fact-specific opinion, issued by a bare plurality of the Court, has been cited in 122 cases since, according to a Westlaw search, including by the Supreme Court as recently as 2013.  It is still a “go-to” source of general contract principles for those who handle contract cases, and likely will continue to be so.

 

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