## Facts

- A radio-equipment manufacturer entered a written land-mobile dealer agreement (1978) with a New Jersey dealer granting rights to sell and service products in a defined northern New Jersey territory.
- The agreement imposed “best efforts” promotional duties and required inventory and service capacity; it also restricted the dealer’s sales to its territory.
- The dealer alleged the arrangement functioned as an exclusive territorial dealership and that the manufacturer later undermined it by permitting other dealers and sales in the same territory.
- The dealer alleged the manufacturer terminated the dealership relationship by about 1985.
- The dealer sued the manufacturer for breach and wrongful termination, and sued other dealers for conspiracy and tortious interference with contractual and prospective economic relations.
- After earlier complaints were dismissed on procedural grounds, the dealer filed a third complaint in 1988 asserting the above claims.
- The trial court granted summary judgment to the manufacturer and two dealer-defendants, ruling all claims time-barred under the UCC four-year statute of limitations for contracts for sale.

## Issues

1. Whether the dealer agreement was predominantly a contract for the sale of goods, making the UCC four-year limitations period (N.J.S.A. 12A:2-725) applicable to the dealer’s contract-based claims against the manufacturer.
2. Whether tort claims for conspiracy and tortious interference against non-signatory dealer-defendants were also governed by the UCC four-year limitations period, or by New Jersey’s six-year tort limitations period.
3. Whether a “wrongful termination” claim is viable where the agreement permits termination without cause.

## Decision

- The court held the agreement was predominantly for the sale of goods; UCC Article 2 applied.
- The court affirmed summary judgment for the manufacturer because the dealer’s contract-based claims were time-barred under the UCC four-year statute of limitations.
- The court held the dealer’s tort claims against the other dealers were not governed by the UCC limitations period and instead fell under the six-year tort statute.
- The court reversed summary judgment for the dealer-defendants on the limitations issue and remanded for further proceedings to determine timeliness under the six-year period.
- The court rejected the dealer’s wrongful termination theory against the manufacturer because the agreement permitted termination without cause, making alleged improper motive legally irrelevant.

## Legal Principles

- A mixed dealership/distributorship contract is governed by UCC Article 2 when its predominant purpose is the sale and distribution of goods; service and promotional duties may be incidental.
- Under N.J.S.A. 12A:2-725, an action for breach of a contract for sale must be filed within four years after the cause of action accrues, generally when the breach occurs, regardless of the plaintiff’s knowledge.
- Tort claims such as conspiracy and tortious interference asserted against non-parties to the sales contract are not automatically subject to the UCC limitations period and may be governed by the separate six-year tort limitations statute.
- Where a contract expressly permits termination without cause, a wrongful termination claim based solely on the terminating party’s motive fails absent an independent legal violation.

## Conclusion

The court treated the dealership agreement as a UCC Article 2 sales contract and barred the dealer’s contract claims against the manufacturer under the UCC’s four-year limitations period, but preserved the dealer’s interference-based tort claims against other dealers under the longer six-year tort limitations period, remanding for timeliness findings and rejecting a motive-based wrongful termination claim under an at-will termination clause.


Custom Commc’ns Eng’g, Inc. v. E.F. Johnson Co., 269 N.J. Super. 531, 636 A.2d 80 (App. Div. 1993)