Common Contract Issues New Jersey Businesses Face and How to Avoid Them

A Practical Guide to the Contract Pitfalls That Cost New Jersey Business Owners Time, Money, and Legal Headaches

By Peter J. Lamont, Esq., March 2026

If you own or operate a business in New Jersey, contracts are the foundation of nearly every relationship you have: with vendors, customers, employees, partners, and landlords. Yet contract issues remain among the most common legal problems that New Jersey businesses face. In our Bergen County practice, we regularly see business owners who signed agreements without fully understanding the risks buried in the fine print, or who relied on informal arrangements that fell apart when a dispute arose. The good news is that most of these contract issues are preventable. This guide walks through the most frequent contract pitfalls we encounter and explains what you can do to protect your business.

Vague or Incomplete Contract Terms

One of the most common contract issues we see in New Jersey is ambiguity. A contract that uses vague language like "reasonable efforts" or "timely delivery" without defining those terms is an invitation for a dispute. When the parties disagree about what "reasonable" means, the matter often ends up in litigation.

Every business contract should clearly spell out the scope of work or services, payment terms and deadlines, what happens if either party fails to perform, and how disputes will be resolved. Under New Jersey law, courts will attempt to interpret ambiguous contract language, but the result may not be what either party intended. The best practice is to eliminate ambiguity before you sign. A New Jersey business attorney can review your contracts and identify terms that need to be tightened up before they become a problem.

Non-Compete and Non-Solicitation Agreement Pitfalls

Many New Jersey business owners rely on non-compete and non-solicitation agreements to protect their customer relationships, trade secrets, and competitive advantages. However, these agreements are only enforceable if they meet certain legal requirements under New Jersey law. Courts in New Jersey will only enforce a restrictive covenant if it protects a legitimate business interest, is reasonable in scope, duration, and geographic area, and does not impose an undue hardship on the employee.

The mistake many businesses make is using a generic, overly broad template downloaded from the internet. A non-compete that restricts an employee from working anywhere in the country for five years will almost certainly be struck down by a New Jersey court. A well-drafted agreement that is tailored to your specific business situation, with reasonable time and geographic limitations, is far more likely to hold up if you ever need to enforce it. If you are a business owner in Wyckoff or anywhere in Bergen County, having an experienced attorney draft or review your non-compete agreements is a worthwhile investment.

Failing to Include Dispute Resolution Provisions

When business owners enter into contracts, they rarely think about what will happen if the deal goes sideways. But failing to include a clear dispute resolution clause is one of the most costly contract issues New Jersey businesses face. Without one, you may find yourself embroiled in expensive litigation in a court that is inconvenient or unfavorable to your position.

A good dispute resolution clause should specify whether disputes will be resolved through mediation, arbitration, or litigation. It should also identify which state's laws govern the contract and which court has jurisdiction. For New Jersey businesses, including a clause that requires disputes to be resolved in New Jersey courts under New Jersey law can save significant time and money compared to being forced to litigate in another state. At the Law Offices of Peter J. Lamont, we routinely draft and negotiate these provisions for our business clients throughout New Jersey.

Overlooking the Statute of Limitations for Contract Issues in New Jersey

Even when a business owner has a valid breach of contract claim, waiting too long to take action can be fatal to the case. In New Jersey, the statute of limitations for breach of contract claims is six years under N.J.S.A. 2A:14-1. That may sound like a long time, but the clock starts ticking from the date of the breach, not from the date you discover it. Business owners sometimes let months or even years pass while trying to resolve a dispute informally, only to realize they have lost their right to sue.

If you believe a business partner, vendor, or customer has breached a contract, the most important step you can take is to consult with an attorney promptly. An experienced breach of contract attorney in New Jersey can assess your claim, advise you on the applicable deadlines, and help you determine the best path forward before time runs out.

The Danger of Verbal Agreements and Handshake Deals

It is surprisingly common for New Jersey business owners to operate on the basis of verbal agreements, especially with people they know and trust. While verbal contracts can be legally binding in New Jersey, they are extremely difficult to enforce. If a dispute arises, it becomes a matter of one party's word against the other, and proving the specific terms of an oral agreement is an uphill battle in court.

New Jersey's Statute of Frauds, codified at N.J.S.A. 25:1-5, also requires certain types of agreements to be in writing to be enforceable, including contracts for the sale of real estate, agreements that cannot be performed within one year, and contracts for the sale of goods over $500 under the Uniform Commercial Code. The bottom line for every New Jersey business owner is simple: put it in writing. Even a straightforward letter agreement or a well-drafted email exchange is better than relying on a handshake.

Inadequate Breach of Contract Remedies and Limitation of Liability Clauses

Another frequently overlooked contract issue involves the remedies available if one party breaches the agreement. Many business contracts include limitation of liability clauses that cap the amount of damages a party can recover, or that exclude certain categories of damages altogether, such as consequential damages or lost profits. Business owners often sign contracts containing these clauses without realizing they are giving up significant legal rights.

Under New Jersey law, limitation of liability clauses are generally enforceable as long as they are not unconscionable. However, the enforceability of these provisions depends on the specific facts and circumstances of each case, including the relative bargaining power of the parties and whether the clause was clearly communicated. Before signing any business contract, it is critical to understand exactly what remedies you would have if the other side fails to perform. A New Jersey contracts attorney can help you negotiate fair terms and ensure you are not unknowingly waiving your right to recover meaningful damages in a breach of contract dispute.

How a New Jersey Business Attorney Can Help You Avoid Contract Issues

The contract issues discussed above are all preventable with proper legal guidance. Whether you are starting a new business in Bergen County, entering into a partnership, hiring employees, or negotiating a commercial lease, having an attorney review your contracts before you sign them is one of the most cost-effective ways to protect your business. The cost of a contract review is a fraction of what a breach of contract lawsuit can cost in legal fees, lost revenue, and disruption to your operations.

At the Law Offices of Peter J. Lamont in Wyckoff, New Jersey, we have spent over two decades helping businesses throughout Bergen County and across the state draft, review, and negotiate contracts that protect their interests. From simple vendor agreements to complex partnership arrangements, our goal is to help you avoid the contract issues that lead to costly disputes. If you have questions about an existing contract or need help drafting a new one, we are here to help.

Contact us today to discuss your business or legal matter. Put our 20+ years of legal experience to work for you.

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For detailed insights and legal assistance on topics discussed in this post, including litigation, contact the Law Offices of Peter J. Lamont at our Bergen County Office. We're here to answer your questions and provide legal advice. Contact us at (201) 904-2211 or email us at  info@pjlesq.com.

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About Peter J. Lamont, Esq.

Peter J. Lamont is a nationally recognized attorney with significant experience in business, contract, litigation, and real estate law. With over two decades of legal practice, he has represented a wide array of businesses, including large international corporations. Peter is known for his practical legal and business advice, prioritizing efficient and cost-effective solutions for his clients.

Peter has an Avvo 10.0 Rating and has been acknowledged as one of America's Most Honored Lawyers since 2011. 201 Magazine and Lawyers of Distinction have also recognized him for being one of the top business and litigation attorneys in New Jersey. His commitment to his clients and the legal community is further evidenced by his active role as a speaker, lecturer, and published author in various legal and business publications.

As the founder of the Law Offices of Peter J. Lamont, Peter brings his Wall Street experience and client-focused approach to New Jersey, offering personalized legal services that align with each client's unique needs and goals​.

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