A confession of judgment is a contract clause, usually bargained for by a landlord or creditor, that allows the landlord or creditor to obtain an expedited judgment against the other party. A confession of judgment can help an aggrieved party to a contract obtain a judgment against the other party without the cost and delay of protracted litigation. Confession of judgment clauses are common in commercial or residential lease agreements and other commercial loan contracts. In a commercial lease agreement for real property, for example, a confession of judgment can be used by the landlord to quickly retake possession of the property or to obtain a money judgment against a non-paying tenant for unpaid rent, CAM and utilities. Confession of judgment cannot be used against a person in connection with a consumer credit transaction (e.g. credit card).
Landlords and business owners should have an attorney prepare the contract with the confession of judgment language since Pennsylvania courts review these clauses with increased scrutiny. The reason for the high level of scrutiny is because the other party will have judgment entered against them without the normal court proceedings. For example, a court may review the contract to make sure the confession of judgment clause is clear and conspicuous. Most lawyers who draft these contracts will make sure the confession of judgment language is separated in its own paragraph and the words are in bold or all CAPS to ensure that the other party to the contract can easily see it. Some lawyers will have the other party sign his or her initials next to the confession of judgment language as proof that the other party saw the language and read it.
To enforce a confession of judgment, the landlord or creditor will file a complaint with the county prothonotary’s office. The Pennsylvania Rules of Civil Procedure set forth very specific requirements when filing a complaint. For example, the complaint must contain the original or a copy of the contract or instrument with the confession of judgment language along with the other party’s signature to the contract. If the judgment can only be entered after a default or an occurrence of a condition precedent by the other party, than the default or the occurrence of the condition precedent must be asserted in the Complaint. The amount of money damages must be accurately computed. This may include interest and attorney’s fees. There are other specific complaint requirements that must be followed. After the Complaint is filed, the prothonotary’s office will enter the Judgment against the tenant or debtor.
Not only does a confession of judgment provide a legal mechanism for an expedited judgment against a tenant or debtor, but the tenant or debtor has very few legal grounds to strike or open the judgment. A tenant or debtor can file a petition to open or strike the confession of judgment and aver that his or her due process rights of notice and hearing was not voluntarily, intelligently or knowing waived. A tenant or debtor can also assert that there is a defect. A defect may include an improper calculation of damages or if the court deems the judgment grossly excessive. If the plaintiff loses on any technical or procedural grounds, the plaintiff can still file a lawsuit against the tenant or debtor. After the judgment is entered, the plaintiff will need to execute on the judgment. There are specific procedural rules for execution on confessed judgment and landlords and creditors should proceed with the assistance of an experienced attorney in collection matters.
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To learn more about Pennsylvania criminal law or the next steps to take, call or contact The Martin Law Firm at 215-687-4053 to schedule a consultation with an experienced attorney who can provide initial guidance and information