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Ravaioli v. Loman Kia

A-3397-09T2 (N.J. Super. App. Div. 2011) (Unpublished)

AGREEMENTS; TIME OF THE ESSENCE — Where an agreement, even a settlement agreement, does not contain a time of the essence clause or a sanction for late payment, it can be presumed that prompt payment is not a material term of the agreement and that a short delay in payment can be considered de minimis and not a breach of a material term of the agreement.

A contestant filed a complaint based on the alleged failure of a car dealership and its advertiser to award him a prize when he received a winning scratch-off mailer for a free car giveaway. In a settlement agreement executed on the day of trial, no one acknowledged fault and there was no statement as to the legal basis upon which the settlement was predicated. The settlement merely required the dealership and advertiser to pay the contestant a specified figure in installments, with the dealership’s share constituting less than twenty percent of the total.

When the contestant’s attorney did not receive a timely payment, he filed a motion to either enforce or vacate the settlement. In reply, the dealership responded that it had sent payment by certified mail, enclosed a copy of the check, and requested the motion’s withdrawal. The contestant refused to do so, and the lower court denied the motion, calling it unnecessary and unreasonable. It refused to award attorney’s fees with the comment that a mere phone call to the dealer would have sufficed. It also found that, even if the timing of the payment was a material term, the ultimate goal of the settlement was achieved by the payment being made within a week after its due date.

On appeal, the contestant argued that the lower court erred in modifying the agreement to create a grace period, creating a pre-action notice requirement prior to the filing of an action to enforce an agreement, refusing to grant attorney’s fees and costs, and requiring a non-defaulting party to demonstrate harm when enforcing a written agreement. The Appellate Division affirmed for substantially the reasons expressed by the lower court. The Court noted that the settlement agreement and release did not contain a time-of-the-essence clause or a sanction for late payment, undermining the contestant’s assertion that prompt payment was a material term. The Court noted that, even if it were a material term, the delay in payment was de minimis.


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