
Robert E. Levy
Partner
201-896-7163 rlevy@sh-law.comFirm Insights
Author: Robert E. Levy
Date: July 4, 2013

Partner
201-896-7163 rlevy@sh-law.comIn a recent case, the Appellate Division of the New Jersey Superior Court clarified that defendants must plead frustration of purpose as an affirmative defense in order to avoid liability when a supervening event makes a defendant’s obligations impractical or impossible to perform.
The Facts of the Case
JB Pool Management v. Four Seasons at Smithville Homeowners Association Inc. involved a contract for pool-related services between a pool management company and a homeowner’s association. During the term of the contract, the condominium’s indoor pool was closed for several months due to mold, and the parties disagreed over whether fees were due under the agreement during this time.
While J.B. Pool Management raised a number of defenses to the resulting breach of contract lawsuit, it did not assert frustration of purpose. Rather, the trial judge raised it during the process of instructing the jury as a more suitable alternative to a proposed charge of impossibility of performance. The jury ultimately found the association was not liable for the four months of disputed fees.
On appeal, J.B. Pool Management raised a number of grounds for reversal, including that the trial court improperly and prejudicially charged the jury on the doctrine of frustration of purpose, despite the fact that Four Seasons had not raised the doctrine as an affirmative defense in its pleadings.
The Court’s Decision
The Appellate Division concluded that litigants seeking to invoke the doctrine of frustration of purpose to avoid their contractual duties generally should plead the doctrine as an affirmative defense. However, the panel acknowledged that because New Jersey law was previously unclear on the issue, it would be unfair to impose the requirement on J.B. Pool Management retroactively.
“Instead, we hold that, in future cases, the defense of frustration of purpose, or impossibility of performance, be raised in a responsive pleading, unless exceptional circumstances excuse that oversight,” the court held.
The court further found that J.B. Pool Management was prejudiced by the late notice of the frustration of purpose affirmative defense and reversed the dismissal of the breach of contract claim. It remanded the case for additional discovery focused on that defense, followed by a new trial.
If you have any questions about this case or would like to discuss the legal issues involved, please contact me, Robert Levy, or the Scarinci Hollenbeck attorney with whom you work.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Business mediation is a confidential, voluntary process in which a neutral third party helps companies negotiate a resolution to a commercial dispute without going to trial. Because working with a mediator is very different from litigating in the courtroom, it is important to understand how commercial mediation works, when it makes sense for your dispute, […]
Author: Paul Grossman

The five most common causes of construction defect litigation are design defects, substandard materials, workmanship defects, code violations, and subsurface defects. Because these flaws can compromise a building’s integrity, functionality, or safety, they frequently lead to disputes involving multiple parties and high financial stakes. Key takeaways: What is Construction Defect Litigation? Construction litigation is complex, […]
Author: Paul Grossman

The most effective ways to protect your business in a divorce are put in place before one begins: a prenuptial or postnuptial agreement, clean separation of business and personal finances, and divorce contingencies built into your operating or buy-sell agreements. If divorce is already underway, the priorities shift to establishing how the business is classified […]
Author: Jay McDaniel

The most common franchise disputes involve breach of contract, franchise termination and non-renewal, intellectual property rights, territorial encroachment, royalty and fee payments, franchisor support obligations, and violations of state franchise laws such as the New Jersey Franchise Practices Act. Franchisors and franchisees can often resolve these conflicts by providing written notice detailing the dispute and […]
Author: Paul Grossman

New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]
Author: Sean M. Pena

No. An eviction does not automatically end a tenant’s obligation to pay rent. Post-eviction rent claims are common because recovering possession resolves who has the right to occupy the premises, but it does not extinguish the tenant’s contractual obligations under the lease. Whether unpaid or future rent remains owed depends on three factors: the lease’s […]
Author: Donald M. Pepe
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!