Confession of Judgment Clause
5/22/2023 | Articles & Alerts, General
A confession of judgment clause, sometimes also known as a cognovit clause or warrant of attorney to confess judgment, is a contractual provision that permits a party to a commercial lease or other commercial contract to skip the entire litigation process and proceed directly to obtaining a judgment against the other party without any pre-judgment opportunity to be heard by the court. A confession of judgment clause can permit a judgment for possession of real property or money damages, or both. Pennsylvania is one of only a handful of states that permit enforcement of confession of judgment clauses.
As a matter of public policy, Pennsylvania strictly construes confession of judgment clauses against the party seeking to enforce them and requires observance of specific formalities in connection therewith. This is because such clauses confer immense power and substantially limit due process. If the required formalities are not observed, the confessed judgment should be stricken by the court upon request of the defendant. The Pennsylvania Supreme Court described this power aptly when it stated that a confession of judgment clause “is perhaps the most powerful and drastic document known to civil law” and “equivalent to a warrior of old entering a combat by discarding his shield and breaking his sword.” As a result, care must be used when drafting a confession of judgment clause and when filing a confessed judgment. It is also why confession of judgment clauses are only permitted in connection with commercial transactions and are prohibited in residential leases and other consumer contracts.
From a defense perspective, if a confessed judgment is somehow legally defective on its face, it can be stricken upon petition of the defendant, although if the clause was properly drafted, the plaintiff may nonetheless be able to re-file the confessed judgment. Alternatively, if a defendant acts promptly and can show that it is a bona fide meritorious defense, a confessed judgment can be “opened” so that the normal litigation process can proceed.
Confession of judgment clauses, and the enforcement and defense thereof, are complicated. If you are negotiating a commercial lease or other commercial contract containing a proposed confession of judgment clause, if you need to file a confessed judgment, or if you have had a confessed judgment filed against you, you should contact an attorney experienced in working with confessions of judgment to ensure that your legal rights are protected. One such attorney is Benjamin R. Picker, Esq., who is a principal in Kaplin Stewart’s commercial litigation department. Mr. Picker has extensive experience with negotiating contracts containing confession of judgment clauses, filing confessed judgments, and seeking to open and/or strike confessed judgments, and has testified as an expert legal witness before the United States House of Representatives’ Small Business Committee on the topic of confession of judgment clauses.
For further information, please feel free to contact Benjamin R. Picker at (610) 941-2533 or email@example.com.
Related Practices: Litigation and Appellate Practice, Commercial Leasing, Contract Review