On appeal from Superior Court of New Jersey, Law Division, Mercer County.
McElroy and Dreier. The opinion of the court was delivered by Dreier, J.A.D.
Defendant has appealed from separate summary judgments granted to plaintiff on the issues of liability and damages. This case raises a question of novel impression concerning the defense of impossibility of performance or frustration of purpose to an otherwise viable breach of contract claim.
The facts are relatively simple. Defendant was awarded a contract to improve an intersection in the City of Linden, Union County. The contract required defendant to provide traffic directors to maintain a safe flow of traffic around the construction site. By agreement dated May 2, 1983, accepted by plaintiff on May 20, 1983, defendant subcontracted for plaintiff's services to provide 780 man-hours of traffic directors at a unit price of $9.90 per hour, or a total contract price of $7,722.00.
Two weeks later, on June 3, 1983, the Resident Engineer of the New Jersey Department of Transportation in charge of the project issued a memorandum that "civilian flagmen will not be allowed to direct traffic in Union County." The memorandum referred specifically to the work to be performed by defendant and the fact that plaintiff had been listed by defendant as the subcontractor for traffic direction. The memorandum further called for the immediate elimination of plaintiff from the job so that the "police can safely direct traffic at the work site." Attached to the memorandum was an internal memorandum of the Union County Prosecutor's Office from an Assistant Prosecutor to the Prosecutor concluding that "civilians may not be authorized to direct traffic."
The memorandum of the Resident Engineer, with the attached Prosecutor's memorandum, were served upon defendant by a uniformed police officer of the City of Linden, who
informed defendant that plaintiff's personnel would not be permitted to direct traffic at the work site. Defendant immediately notified plaintiff of this directive and, although plaintiff sent traffic directors on the first day of the job, they were denied permission to perform their services.*fn1 Defendant, in order to satisfy its contract to provide traffic direction, retained the services of off-duty policemen for which it paid a greater price than that for which it had originally contracted with plaintiff.
Plaintiff through interrogatories determined that police traffic directors actually worked 2,577 man-hours on the job. Had plaintiff been permitted to perform, the gross payment to it for the extended contract would have been $25,512.30. After subtracting the direct labor costs, travel allowances and social security and employment contributions, the total profit to plaintiff was computed to be $14,142.58 for which judgment was entered, over defendant's objections that there had been no allocation for indirect administrative expenses.
Although the parties have argued whether the prosecutor's memorandum and engineer's directive were legally correct, that is not the issue before us. Had the directive been outlandish and had time been available for an administrative or judicial review, there may have been some reason to delve into this issue. We must, however, view this matter through the eyes of the parties, given the contemporaneous monetary and time constraints facing them. The contract was made between plaintiff and defendant on May 20, 1983, and plaintiff was called on Friday, June 3, 1983 to commence work Monday, June 6, 1983. Sometime over that weekend defendant was served with the memoranda and direction by the Resident Engineer in charge of the project. Although administrative or judicial
remedies may then have been resorted to, they were equally available to both sides.
By way of hindsight, it would be easy for us to say that defendant should have challenged the engineer's directive, obtained a temporary judicial stay or administrative review, refused to hire the off-duty policemen and run the attendant risks of being in breach of its own construction contract and being disqualified from future public contracts. Defendant complied with what apparently was a valid order of the authorized representative of the Department of Transportation, buttressed by the authority of the Union County Prosecutor's Office and subject to apparent immediate implementation by the local police. It was error for a ...