New Jersey business law enforces both oral and written contracts for the delivery of goods and services. However, in the case of Pantos USA, Inc. v. MindsInSync, Inc., when disputes arise, a New Jersey appeals court once again emphasized that evidence is king.
Background
In 2018, Pantos USA, Inc., provided “freight forwarding, logistics and warehousing services” to MindsInSync, Inc., Choice Select Home Textiles, In., Ideas From the Ground Up, Inc., and 101 Home Textile Creations, Inc. When they did not pay, Pantos sued them in the Law Division of the Superior Court of New Jersey. The defendants denied that there was a written contract, and claimed that Pantos’s services were unsatisfactory.
After exchanging discovery, Pantos filed a motion for summary judgment, arguing to the Court that even if all the evidence was taken in the light most favorable to the defendants, there were no genuine questions of material fact which needed to be decided by a jury, and it should prevail as a matter of law. Pantos’s Chief Financial Officer swore that Pantos provided the services but there remained $337,214 due, which the Defendants refused to repay.
The defendants denied that there was a written contract, but admitted that Pantos had provided “freight forwarding, logistics and warehousing services” on a “per-delivery basis.” However, they argued that Pantos was not entitled to payment because it unreasonably increased its rates, delayed deliveries and improperly took certain deliveries. They claimed that Pantos was first supposed to provide a quote for individual deliveries which they would either accept or reject, but it did not do so.
The judge rejected the defendants’ arguments and granted summary judgment in favor of Pantos for the full $337,214. The judge found that despite their arguments, the defendants admitted the validity of the invoices. Moreover, they did not point to any facts that would show there was no agreement, except for their after the fact objections first raised in the litigation.
The Appellate Decision – Evidence, Evidence, Evidence
The Defendants appealed to the Appellate Division of the Superior Court. However, the Appellate Division affirmed the Law Division judge’s decision.
The Court explained that under New Jersey business law:
To prevail on a claim for breach of contract, a plaintiff must prove: (1) the parties entered into a contract containing certain terms; (2) plaintiff[] did what the contract required [plaintiff] to do; (3) defendants did not do what the contract required them to do; and (4) defendants’ breach, or failure to do what the contract required, caused a loss to the plaintiff.
Here, it was undisputed that the services were provided, establishing that Pantos performed as required. Moreover, even though a written contract was not produced, it was undisputed that the services were invoiced without objection, which established the terms of the agreement – and significantly the Defendants did not argue that there wasn’t an oral agreement. It was also undisputed that that there were $337,214 in invoices which were unpaid.
Fatally for the defendants, there was no evidence linking their objections in litigation to the services for which the invoices remained unpaid or even to link the alleged overbilling to any invoices. Even more significant, however, there were no objections raised at the time of the services or the invoices.
The Appellate Division therefore upheld the judges decision ordering the Defendants to pay Pantos $337,214.
The Takeaway
When dealing with commercial transactions, if there is a dispute it is key to address the problem early, as soon as the discrepancy is discovered. And as in all situations, document, document, document – evidence is key. If the first time a transaction is disputed is after suit has been filed, it lacks the credibility of a timely objection which would have stopped the other party from continuing to perform. Had the defendants in this case objected after receiving the invoices so that Pantos would have known to cease providing the services, the outcome might have been very different.
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