Opinion ID: 3010008
Heading Depth: 3
Heading Rank: 2

Heading: General New Jersey Contract Law Principles

Text: Under general common law contract principles, applicable in New Jersey and elsewhere, one who breaches a contract must compensate the injured non-breaching party so as to put it in the position it would have occupied had performance been rendered as promised. Donovan v. Bachstadt, 453 A.2d 160, 165 (N.J. 1982); 5 ARTHUR L. CORBIN, CORBIN ON CONTRACTS § 992 (1951). A court in a breach of contract case aims to fashion a remedy in order to compensate the non-breaching party fully. Donovan, 453 A.2d at 165; 5 ARTHUR L. CORBIN, CORBIN ON CONTRACTS § 992 (1951). The New Jersey courts have long maintained a liberal rule that non-breaching parties are entitled to damages. Cf. In re Merritt Logan, Inc., 901 F.2d 349, 357 (3d Cir. 1990) (interpreting New Jersey contract damages law); Sandler v. Lawn- A-Mat Chem.& Equip. Corp., 358 A.2d 805, 814 (N.J. Super. Ct. App. Div.), cert. denied, 366 A.2d 658 (N.J. 1976) (non-breaching party presumptively entitled to damages, with doubts resolved against the breaching party). New Jersey courts have also narrowly construed clauses that tend to restrict a party's right to recover its full common law damages. See American Sanitary Sales Co. v. State, 429 A.2d 403, 407 (N.J. Super. App. Div.), cert. denied, 434 A.2d 1094 (N.J. 1981) (narrowly interpreting a no damage for delay clause in a New Jersey state contract). The reluctance of the New Jersey Courts to give expansive effect to exculpatory clauses extends to cases involving its own government agencies. See, e.g., Buckley & Co., Inc. v. State, 356 A.2d 56, 62 (N.J. Super. Ct. Law Div. 1975); Ace Stone, Inc. v. Township of Wayne, 221 A.2d 515, 518-19 (N.J. 1966); American Sanitary Sales Co., 429 A.2d at 407; see also Department of Transp. v. Arapaho Constr., Inc., 357 S.E.2d 593, 594-95 (Ga. 1987) (relying in part on Ace Stone). Moreover, under New Jersey law there is a presumption against finding a contractual intent to alter common law rights and remedies. See, e.g., Gibraltar Factors Corp. v. Slapo, 125 A.2d 309, 310 (N.J. Super. Ct. Law Div. 1956) (parties presumed to contract with reference to existing law), aff'd, 129 A.2d 567 (N.J. 1957), appeal dismissed, 355 U.S. 13 (1957); see also Rescigno v. Picinich, 377 A.2d 733, 739 (N.J. Super. Ct. Law Div. 1977) (applying a presumption against a statutory intent to alter common law rights); Blackman v. Iles, 71 A.2d 633, 636 (N.J. 1950) (same). Indeed, New Jersey courts commonly award contractors common law contract damages against the State, including damages for delay. See, e.g., American Sanitary Sales Co., 429 A.2d at 407; Buckley & Co., 356 A.2d at 65 (see also cases cited therein).