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Appellate Division Finds Offer, Acceptance, And Binding Oral Contract In Home Repair Case

March 18, 2019

ROBERT B. SPAWN reports on a recent unpublished decision from the Superior Court of New Jersey, Appellate Division.

In a recent New Jersey case, a Defendant-Building Company (“Builder”) appealed a $2,836 Special Civil Part judgment in favor of a Plaintiff-Installation Company (“Installer”) regarding the installation of cabling at a home the Builder had constructed for a Defendant-Homeowner.


At trial, the Installer’s Managing Member testified that he sent the Builder a written estimate of $5,404 for the installation of an alarm system in the Homeowner’s new house.  Upon receiving the estimate, an employee of the Builder orally told the Managing Member of the Installer to proceed with the work, and the Installer then discussed the details of the installation with the Homeowner.  The Installer then began the installation process, but the Homeowner subsequently “changed his mind” regarding the project when it was only half-completed.  As a result, the Installer was not able to install anything beyond cabling for the alarm system.  Nonetheless, the Installer sent an invoice for the cabling ($2,782 plus tax) to the address of the new home.  Both the Homeowner and the Builder refused to pay the invoice, each contending that the other party was responsible. 


More specifically, the Builder maintained that it simply referred the Installer to the Homeowner, and that the Installer entered into a contract solely with the Homeowner.  However, the trial court disagreed and found that the Builder and the Installer - not the Homeowner - formed a contract, explaining that the first conversations and arrangements for the project were between the Installer and the Builder, and the subsequent involvement of the Homeowner did not alter that initial relationship.  The trial court thus entered judgment in the Installer’s favor for the invoiced amount plus costs (totaling $2,836), and ordered the Builder to pay in full.


On appeal, the Builder challenged the trial court’s finding that it entered into a contract with the Installer, and pointed to the following facts in support of its contention: (1) the Installer sent an invoice to the address of the new house, not to the address of the Builder; (2) the Installer negotiated the specifics of the work with the Homeowner; and (3) the Installer never sought acceptance from the Builder. 


The Appellate Division found these arguments unconvincing, and asserted that the Installer’s offer (sending the written estimate) and the Builder’s acceptance (orally telling the Installer to begin the work) constituted a contract because both the Builder and the Installer’s prospective obligations could be ascertained with reasonable certainty (the Builder was to pay the Installer, and the Installer was to install the alarm system).  The Appellate Division further explained that the facts cited by the Builder above were at best circumstantial evidence that a contract was not formed, and that the trial court was not required to give those facts any consideration after finding a written offer by the Installer and an oral acceptance by the Builder.  Accordingly, the Appellate Division held that the Builder was responsible for the subject invoice, and affirmed the lower court’s money judgment to the Installer.  


Please contact Robert B. Spawn if you have any questions or need assistance in connection with this subject.