Is our unsigned or partly-written deal enforceable in New Jersey?
For an interest in real estate, New Jersey does NOT require a writing outright: an agreement to transfer an interest in real estate, or to hold one for another's benefit, is enforceable if the description of the real estate, the nature of the interest, the existence of the agreement and the identity of transferor and transferee are established in a writing signed by or on behalf of the party against whom enforcement is sought, OR are proved by clear and convincing evidence. For a sale of goods of $500 or more, the ordinary UCC writing requirement applies, with the merchant-confirmation, specially-manufactured-goods, admission (capped at the quantity of goods admitted) and payment-or-delivery-accepted escapes. The 1995 recodification has four more limbs a deal can land on. The CONVEYANCE itself is effective only on a writing signed by the transferor, or where the transferee has been put in possession and has paid or relied to its detriment; a transaction that fails that is enforceable only as an AGREEMENT under § 25:1-13 (§ 25:1-11, which does not apply to leases, or to the creation of easements by prescription or implication). A lease of more than three years needs the premises, term and parties in a signed writing or proved by clear and convincing evidence (§ 25:1-12). A promise to answer for another's obligation must be in a writing signed by the promisor, consideration need not be stated (§ 25:1-15): the one limb with no clear-and-convincing escape. Read all of these through the Act's own definition, which is wider than "real estate" sounds: an interest in real estate "means any right, title or estate in real estate, and shall include a lease of real estate, a lien on real estate, a profit, an easement, an interest in a trust in real estate and a share in a cooperative apartment", and a transfer of one "means the sale, gift, creation or extinguishment of an interest in real estate" (§ 25:1-10), so a co-operative apartment share and the grant of an easement are inside these sections. And the escape has a ceiling: unwritten transactions and agreements "are not effective against bona fide purchasers for valuable consideration without notice or against lienors without notice" (§ 25:1-14).
The trap
This is the reverse of the assumption most drafters bring: since the 1995 recodification a New Jersey real-estate agreement can be enforced with NO writing at all if the four elements are proved by clear and convincing evidence, so 'there is nothing signed' is not a defence and pre-contract correspondence is dangerous. The counterweight sits in a different section: a real estate broker's commission needs a writing signed by the principal or the principal's authorized agent, and a business broker's a writing signed by the seller or buyer or authorized agent, in each case stating either the amount or the rate of commission, unless the broker both serves the statutory five-day written notice of the oral agreement and, before the principal serves a written rejection of it, either effects the transfer or sale or in good faith enters negotiations with a prospective party who later effects it (§ 25:1-16(d)): the notice served personally, or by registered or certified mail, at the last known address of the person to be served (§ 25:1-16(e)). For goods, note § 12A:2-201(1)'s quantity rule, a writing that misstates a term still works, but the contract is not enforceable beyond the quantity shown.
8 authorities
- statuteN.J. Stat. Ann. § 25:1-13enactment date not established
The words that state the rule
An agreement to transfer an interest in real estate or to hold an interest in real estate for the benefit of another shall not be enforceable unless: a. a description of the real estate sufficient to identify it, the nature of the interest to be transferred, the existence of the agreement, and the identity of the transferor and transferee are established in a writing signed by or on behalf of the party against whom enforcement is sought; or b. a description of the real estate sufficient to identify it, the nature of the interest to be transferred, the existence of the agreement and the identity of the transferor and the transferee are proved by clear and convincing evidence.
- statuteN.J. Stat. Ann. § 12A:2-201enactment date not established
The words that state the rule
(1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing. (2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within ten days after it is received. (3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable. (a) if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller's business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or (b) if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or (c) with respect to goods for which payment has been made and accepted or which have been received and accepted (12A:2-606).
- statuteN.J. Stat. Ann. § 25:1-11enactment date not established
The words that state the rule
a. A transaction intended to transfer an interest in real estate shall not be effective to transfer ownership of the interest unless: (1) a description of the real estate sufficient to identify it, the nature of the interest, the fact of the transfer and the identity of the transferor and the transferee are established in a writing signed by or on behalf of the transferor; or (2) the transferor has placed the transferee in possession of the real estate as a result of the transaction and the transferee has paid all or part of the consideration for the transfer or has reasonably relied on the effectiveness of the transfer to the transferee's detriment. b. A transaction which does not satisfy the requirements of this section shall not be enforceable except as an agreement to transfer an interest in real estate under section 4 of this act. c. This section shall not apply to leases. d. This section shall not apply to the creation of easements by prescription or implication.
- statuteN.J. Stat. Ann. § 25:1-12enactment date not established
The words that state the rule
A transaction intended to create a lease of real estate for more than three years shall not be enforceable unless: a. the leased premises, the term of the lease and the identity of the lessor and the lessee are established in a writing signed by or on behalf of the party against whom enforcement is sought; or b. the real estate, the term of the lease and the identity of the lessor and the lessee are proved by clear and convincing evidence.
- statuteN.J. Stat. Ann. § 25:1-14enactment date not established
The words that state the rule
Transactions involving an interest in real estate, and agreements to transfer an interest in real estate or to hold an interest in real estate for the benefit of another, which are not established in a writing, are not effective against bona fide purchasers for valuable consideration without notice or against lienors without notice.
- statuteN.J. Stat. Ann. § 25:1-15enactment date not established
The words that state the rule
A promise to be liable for the obligation of another person, in order to be enforceable, shall be in a writing signed by the person assuming the liability or by that person's agent. The consideration for the promise need not be stated in the writing.
- statuteN.J. Stat. Ann. § 25:1-16enactment date not established
The words that state the rule
a. As used in this section: "Business broker" means a person who negotiates the purchase or sale of a business. "Negotiates" includes identifies, provides information concerning, or procures an introduction to prospective parties, or assists in the negotiation or consummation of the transaction. "Purchase or sale of a business" includes the purchase or sale of good will or of the majority of the voting interest in a corporation, and of a major part of inventory or fixtures not in the ordinary course of the transferor's business. "Real estate broker" means a licensed real estate broker or other person performing the services of a real estate agent or broker. "Transfer or sale" means the transfer of an interest in real estate or the purchase or sale of a business. b. Except as provided in subsection d. of this section, a real estate broker who acts as agent or broker on behalf of a principal for the transfer of an interest in real estate, including lease interests for less than three years, is entitled to a commission only if before or after the transfer the authority of the broker is given or recognized in a writing signed by the principal or the principal's authorized agent, and the writing states either the amount or the rate of commission. For the purposes of this subsection, the interest of a mortgagee or lienor is not an interest in real estate. c. Except as provided in subsection d. of this section, a business broker is entitled to a commission only if before or after the sale of the business, the authority of the broker is expressed or recognized in a writing signed by the seller or buyer or authorized agent, and the writing states either the amount or the rate of commission. d. A broker who acts pursuant to an oral agreement is entitled to a commission only if: (1) within five days after making the oral agreement and before the transfer or sale, the broker serves the principal with a written notice which states that its terms are those of the prior oral agreement including the rate or amount of commission to be paid; and (2) before the principal serves the broker with a written rejection of the oral agreement, the broker either effects the transfer or sale, or, in good faith, enters negotiations with a prospective party who later effects the transfer or sale. e. The notices provided for in this section shall be served either personally, or by registered or certified mail, at the last known address of the person to be served.
- statuteN.J. Stat. Ann. § 25:1-10enactment date not established
The words that state the rule
1. Definitions. As used in this act: "Interest in real estate" means any right, title or estate in real estate, and shall include a lease of real estate, a lien on real estate, a profit, an easement, an interest in a trust in real estate and a share in a cooperative apartment. "Transfer of an interest in real estate" means the sale, gift, creation or extinguishment of an interest in real estate.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.