What are the Statutes of Limitation for Breach of Contract and Fraud in NJ?
A statute of limitation places a time limit on how long a person has to file a claim in court. Civil legal matters must be handled expediently and cannot be pursued indefinitely. For example, in New Jersey, breach of contract and fraud causes of action are both claims to which a statute of limitations apply. (The fraud referred to in this blog is common law fraud and is not derived from any statute.)
A breach of contract is defined as failing to perform any term of a contract, written or oral, without a legitimate legal excuse. This may include not completing a job, not paying in full or on time, being late without excuse, or any act which shows the party will not complete the work previously agreed upon.
Fraud is not mere dishonesty. It is calculated. Fraud is a misrepresentation that intends to mislead the innocent party and causes damage to that party. Fraud can also arise by omission (i.e. intentionally failing to disclose preexisting termite damage in a real estate transaction). Fraud claims can arise in many situations including real estate transactions, shareholder and partnership disputes, improper conduct of officers or shareholders of a corporation and in sales of any kind.
In any case where a statute of limitation defense is asserted, the court will determine if the claim was filed timely. In these situations, the person making the claim (the plaintiff) is responsible for proving that his or her case is not barred by the statute of limitation.
The New Jersey statute of limitations for breach of contract and fraud are as follows:
Six Year Statute of Limitation for Breach of Contract, Non-Sales Contracts
A non-sales contract simply means a contract which does not involve the sale of goods (goods generally are anything that you can move). Anyone making a claim based on such an agreement, has six years to file a lawsuit. The cause of action accrues (the date when the clock starts ticking) when the breach occurred.
Four Year Statute of Limitation for Breach of Contract, Sales of Goods
Where the breach of contract involves the sale of goods, New Jersey follows a four year period of limitation.
Six Year Statute of Limitation for Fraud
New Jersey follows a six year statute of limitation for fraud. The clock starts ticking as of the date of the act or omission that led to the fraud claim.
The Discovery Rule
For claimants who are out of time, there still may be hope. New Jersey follows the “Discovery Rule”. The Discovery Rule is a judicially-created mechanism that in some cases allows the injured party to still pursue a claim beyond the traditional statute of limitation. In such situations, the statute of limitation is calculated from the time period that the person discovers the injury or harm or from the point in time when the injury or harm should have been discovered. However, the Discovery Rule does not apply to contracts involving the sale of goods.
If you or your business has been aggrieved in any way, be mindful of statute of limitations issues and do not sit and wait. Contact the Law Office of H. Benjamin Sharlin LLC for an initial free consultation.
The Law Office of H. Benjamin Sharlin LLC is owned and operated by H. Benjamin Sharlin and serves all of Mercer County, New Jersey and the surrounding areas. Mr. Sharlin is a bilingual Spanish-speaking attorney who vigorously represents the interests of all his clients.
Please be advised that this blog is for informational purposes only, is not legal advice and does not create an attorney-client relationship.
The Law Office of H. Benjamin Sharlin LLC
is owned and operated by H. Benjamin Sharlin and serves all of Mercer County, New Jersey and the surrounding areas. Mr. Sharlin is a bilingual Spanish-speaking attorney who vigorously represents the interests of all his clients.
Call (609) 585-0606 or click the button below to schedule an appointment