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ESPJ Construction Corporation v. Schiavone

A-5287-06T1 (N.J. Super. App. Div. 2008) (Unpublished)

CONTRACTS; UCC — A contract calling for a supplier to pour cement as part of a construction project is not governed by the Uniform Commercial Code because concrete, once poured and set, is not a movable item for sale and cannot be resold after installation.

A mason had an oral agreement with a company that sold and installed in-ground swimming pools. It called for the mason to pour cement around pools that were installed at the homes of the company’s customers. The mason, who supplied the cement for the jobs, was not paid for sixty-four jobs that were completed over a two year period and sued the company for payment. The parties disagreed on the terms of the contract. The mason claimed that he was to receive $900, plus $500 if edgework was necessary, out of the first $3,000 the company received from each customer and that the mason would pay a ten percent commission to the company for any additional work he negotiated with any customers. The company argued that it was only to pay the mason $800 for his services if he did not obtain additional work contracts with the customers. The lower court found the mason’s testimony more credible and determined that according to the company’s argument, the mason would have agreed to perform a considerable amount of work without knowing whether a customer would contract for additional work, which was found by the lower court to be unlikely. Business summaries presented by the mason were partially relied upon by the lower court, which awarded the mason the amount it claimed, less amounts from a billing error and repair work subsequently done on the mason’s jobs.

On appeal, the Appellate Division disagreed with the company’s argument that the summaries presented by the mason should not have been accepted by the lower court and found that they satisfied the standard of admissibility because they were made in the regular course of business, were prepared close to the time of his jobs, and that they were justified under the circumstances. It also rejected the company’s argued that the contract was unenforceable according to the Uniform Commercial Code (UCC) because it was an oral contract for the sale of goods totaling more than $500 and not for services. The Court found that the contract was for the sale of services and that the UCC did not apply because the concrete that was poured and set was not a moveable item for sale and could not be resold after installation. It pointed out that if the UCC did apply, the mason still had a claim because of his partial performance in completing sixty-four jobs. The lower court’s finding in favor of the mason’s interpretation of the contract and its award to the mason were affirmed.

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