Fairfield Leasing Corp. v. Techni-Graphics, Inc. - 256 N.J. Super. 538, 607 A.2d 703 (Super. Ct. 1992)

Rule:

Since the inestimable right to civil jury trial is preserved in N.J. Const. art. I, § 9, it is fit that the courts protect that right as a matter of public policy at least to the extent that the Uniform Commercial Code, N.J. Stat. Ann. § 12A:1 et seq., protects against waivers of warranties and limitations of remedy. Therefore, where a non-negotiated jury waiver clause appears inconspicuously in a standardized form contract entered into without assistance of counsel, the waiver should not be enforced.

Facts:

Defendant Techni-Graphics, Inc. signed a 39-month lease for a coffee machine at a rental of $ 209.50 per month with third-party defendant U-Vend, Inc. Defendant Robin Umstead guaranteed performance of the lease for TGI. U-Vend assigned the lease to plaintiff, Fairfield Leasing Corporation. Under the contract only U-Vend was responsible to TGI for failures with respect to the leased equipment, and payment to the assignee of the monthly rent must continue despite any breach of contract by U-Vend. TGI alleged that the machine was defective and infested with cockroach larvae. Because U-Vend refused to take corrective action, TGI stopped making the rental payments to FLC. Consequently, FLC instituted suit and TGI brought in U-Vend by way of a third-party complaint based on breach of contract. TGI demanded a trial by jury on all issues. Plaintiff FLC and third-party defendant U-Vend filed a motion to strike the jury demand based on a waiver provision in the non-negotiated, standardized lease contract.

Issue:

Should the court enforce a waiver of the constitutional right of trial by jury contained in a contract of adhesion?

Answer:

No.

Conclusion:

The court denied the motion. The court held that because the contract was one of adhesion, plaintiff FLC and third-party defendant U-Vend had the burden to prove that defendant TGI’s waiver was knowing and voluntary. The court noted a strong presumption against waiver of the right to jury trial guaranteed by U.S. Const. amend. VII and N.J. Const. art. I, § 9. The court held that the requirement of the Uniform Commercial Code, N.J. Stat. Ann. § 12A:1 et seq., that warranty disclaimers be conspicuous applied to waivers. The court declined to enforce the waiver, which was not conspicuous because it was buried in a 25-line paragraph in type less than one centimeter high.