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Continental Trading and Hardware v. Fajardo

A-6973-97T1 (N.J. Super. App. Div. 1999) (Unpublished)

CONTRACTS; UCC; STATUTE OF LIMITATIONS—Even if the “running account” exception to the statute of limitations applied to collection of monies owed for the sale of goods, it would do so in the context of the four year limitation under the Uniform Commercial Code.

A contractor bought building supplies on credit. The purchases were made from time to time and bills were usually sent on a monthly basis. Payments on account never fully paid the balance. The last bill sent on the running account in January of 1992 called for payment in early February. No payment was made and a collection law suit was filed about five and one half years later. The lower court dismissed the complaint based on the four-year statute of limitations provided for in the Uniform Commercial Code (UCC) in respect of the sale of goods. On appeal, the supplier argued that the six-year general statute of limitations for contracts governed the relationship of the parties because it, the contractor, was not a merchant. The Court disagreed, holding that because a “merchant” under the UCC includes any person “who deals in goods. ,” both parties in this action were merchants. Moreover, the Court held that even if it were to assume that the contractor was not a merchant but an ordinary consumer, the UCC still controlled because the transactions involved the sale of goods. The supplier also argued that its action was timely because of the “running account” exception to N.J.S. 2A:14-1. The Court disagreed and further held that New Jersey and “most jurisdictions apply their Uniform Commercial Code statute of limitations to actions involving ‘running accounts’ based on the sale of goods.” Further, case law makes the assumption that if the “running account” exception applied, it would do so in the context of the UCC’s four-year limitation.


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