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DirecTech Delaware, Inc. v. Allstar Satellite, Inc.

2010 WL 1838573 (U.S. Dist. Ct. D. N.J. 2010) (Unpublished)

CONTRACTS; ENFORCEABILITY — Even though a party does not receive a signed contract, if it manifests its agreement to the offer’s terms by performing in accordance with the offer, its manifestation constitutes an assent to the terms of the offer and an enforceable contract is created.

A company performed installations on behalf of a satellite television services provider. The installation company was told that it was required to sign a contract to memorialize their agreement, and that the failure to sign would result in the termination of the business relationship. The installation company signed the contract, but it never received a fully executed copy of the contract signed by the satellite company. The contract required the installation company to carry insurance, including worker’s compensation insurance. The installation company did not carry worker’s compensation insurance as required by the terms of the written contract. The installation company hired a technician to perform installations on its behalf and listed the technician as an independent contractor. The technician was injured on the job and filed a worker’s compensation claim against the satellite company and the installation company. The satellite company sued the installation company for breach of contract and common law fraud, based on its failure to maintain the required worker’s compensation insurance.

The satellite company moved for summary judgment, alleging that there was a valid and enforceable contract requiring the installation company to maintain worker’s compensation insurance. It argued that the installation company breached the contract by not maintaining the required insurance. The installation company filed a cross-motion for summary judgment, arguing that there was no enforceable contract since it was never fully executed. Further, even if it was signed, the circumstances under which the installation company signed the contract rendered it invalid. Its President argued that he felt compelled to sign the agreement immediately and had not read it.

The lower court found a valid, enforceable contract. It noted that under New Jersey law an enforceable contract is created when the parties “agree on essential terms and manifest an intention to be bound by those terms.” The agreement can be evidenced by a written document or implied from the parties’ conduct and the surrounding circumstances. When a contract is presented for signature and only one party signs it, there is an offer but the question of whether it was accepted it not clear. There must be a manifestation of assent to the terms of the contract in a manner required by the contract. In this case, the contract was signed by the installation company and it required the installation company to maintain worker’s compensation insurance as a condition of getting installation jobs. The installation company’s signing of the contract constituted an offer. The television service provider could have accepted the offer by signing it, but it did not. It did, however, manifest its agreement to the contract’s terms by providing the installation company with work orders to install satellite television systems in accordance with the contract’s terms. Therefore, there was an enforceable contract.

However, the lower court was not willing to find a breach of contract based on the installation company’s failure to maintain worker’s compensation insurance. The issue of breach depended on the resolution of the technician’s worker’s compensation claim. If it was later determined that the technician was an employee, and not and an independent contractor, then there would be a breach. However, that case was not yet resolved.

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