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In business litigation, what is summary judgment?

When you enter into business or commercial litigation, you expect either to settle out of court or to have a trial. In some situations, however, the trial is cut short because one party files for summary judgment and a judge grants that motion. What is summary judgment?

It helps to understand that there are two basic things to be decided at any trial: the facts and the law. The facts are the "who, what, when, where and why" of the trial. For example, a judge or jury might be asked to determine who breached a particular contract, on which date, in what jurisdiction and for what purported reason. Once the facts are determined, the judge applies the law. Examples of legal questions include whether the contract was valid and whether the breaching party's reasons excuse their conduct.

At least some of the facts are generally in dispute. It is also possible for the parties to dispute what laws should apply and how they should be applied.

A summary judgment motion is a claim that there is no genuine dispute in the case. Essentially, the party making the motion contends that there is no point to a trial because the parties substantially agree on the facts and, given those facts, the other party cannot win the case. It is filed at the very beginning of trial in an effort to avoid unnecessary litigation.

How is a motion for summary judgment decided?

The way a judge decides a motion for summary judgment is to accept, for the sake of argument, the non-moving party's statement of the facts. For our purposes, let's assume that the defense has filed a motion for summary judgment against the plaintiff in a breach of contract case. The plaintiff has claimed that the parties entered into an oral contract for the defendant to purchase mineral rights on the plaintiff's property, but the defendant never paid.

The defendant's motion for summary judgment alleges that the plaintiff has no real case. To make a ruling, the judge assumes for the moment that everything the plaintiff claims is true.

In this case, the defendant's motion for summary judgment would likely be granted. This is because, in New Jersey, contracts to transfer real property -- including mineral rights -- must be in writing to be valid. Therefore, even if the plaintiff is telling the truth about the facts, she cannot enforce the contract.

If you encounter a motion for summary judgment in a trial you are involved in, don't worry. It is simply the other party's first chance to argue that there is no dispute to be tried.

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