FRYE, Justice.
The parties to this action bring two questions before this Court: 1) whether the trial court erred in finding that defendant’s failure to respond to the complaint in this action was the result of excusable neglect; and 2) whether the doctrine of collateral estoppel may constitute a meritorious defense in this case. We answer the first question in the negative and affirm the Court of Appeals [423]*423on that issue. We answer the second question yes and reverse the courts below on this issue.
This action stems from the breach of a contract between the sellers (defendant Hall and her husband) and plaintiff auctioneer, Thomas M. Mclnnis & Associates, Inc. (Mclnnis). On 21 July 1980, Janet Hall and her husband, Bobby Hall, entered into an auction contract with Thomas M. Mclnnis & Associates, Inc., which provided that Mclnnis would sell the Hall’s 70-acre poultry farm in exchange for commissions based on a percentage of the sale price. After the highest bidder had been determined at the 22 July 1980 auction, a dispute arose between the highest bidder and the Halls. As a result of the dispute, the sale was never completed.
In December 1980, Bobby Hall filed suit against Mclnnis seeking $9,750, the amount of earnest money paid in escrow by the highest bidder at the auction sale. In January 1981, without joining Mrs. Hall as a party to the action, Mclnnis filed a counterclaim asking the court to award it damages for breach of the auction contract, consisting of $7,800 in commissions, together with interest at the legal rate from the date of sale. Judgment was entered in favor of Mclnnis on 11 March 1983 for $7,800 with interest to run thereon from the date of judgment, not the date of sale.
Mclnnis did not request that the issue of interest be submitted to the jury, and the jury was not instructed on this issue. Rather, Mclnnis contended that interest was payable from the date of breach of the contract as a matter of law. The judge expressed the opinion that the question of interest on the breach of contract was a jury question and had been waived in the absence of a timely request that the issue of interest be submitted to the jury. He therefore declined, as a matter of law, to award interest payable from the date of breach and instead awarded interest only from the date of the judgment. Mclnnis did not appeal this decision.
Mclnnis thereafter commenced execution proceedings on the judgment against Bobby Hall. On 27 May 1983, it filed a complaint against Janet H. Hall (defendant herein), seeking damages for breach of the auction contract, again seeking $7,800 in commissions together with interest at the legal rate from the date of sale. On 3 June 1983, Bobby Hall paid the judgment against him, [424]*424including interest figured from the date of judgment. Three days later, Janet Hall was served with summons and a copy of the complaint that had been filed on 27 May 1983. Under the assurance from her husband that this matter had been resolved and that there was no necessity to respond to plaintiff’s complaint, Janet Hall did not file an answer or otherwise respond to the complaint. As a result of this failure, default judgment was eventually entered on 25 July 1983 against her in the amount of $1,678.56, the difference between the interest calculated from the date of sale and the interest awarded from the date of judgment in the earlier action against Bobby Hall.
On 28 February 1984, the trial court denied Janet Hall’s Rule 60(b)(1) motion to set aside the default judgment against her, finding that her failure to respond to the complaint constituted excusable neglect but that she had failed to demonstrate a meritorious defense to the plaintiffs claim. The Court of Appeals in a divided opinion affirmed the lower court’s decision.
To set aside a judgment on the grounds of excusable neglect under Rule 60(b), the moving party must show that the judgment rendered against him was due to his excusable neglect and that he has a meritorious defense. Cayton v. Clark, 212 N.C. 374, 193 S.E. 404 (1937); Wynnewood Corp. v. Soderquist, 27 N.C. App. 611, 219 S.E. 2d 787 (1975); Bank v. Finance Company, 25 N.C. App. 211, 212 S.E. 2d 552 (1975). Defendant asserts on appeal before this Court that the doctrine of collateral estoppel is applicable to the plaintiffs claim and constitutes a meritorious defense to this breach of contract action. Plaintiff, in whose favor we granted a writ of certiorari on 28 January 1986, seeks reversal of that portion of the Court of Appeals’ opinion which affirmed the trial court’s finding of excusable neglect. We will address plaintiffs contention first.
I.
Plaintiff contends that the trial court erred in finding that defendant’s failure to respond to the complaint in this action was the result of excusable neglect. This Court finds no merit in plaintiffs argument.
Rule 60(b) of the North Carolina Rules of Civil Procedure provides that:
[425]*425On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons:
(1) Mistake, inadvertence, surprise, or excusable neglect
N.C.R. Civ. P. 60(b). Although a motion for relief under Rule 60(b) is addressed to the sound discretion of the trial court and will not be disturbed unless the trial court has abused its discretion, Sink v. Easter, 288 N.C. 183, 198, 217 S.E. 2d 532, 541 (1975), whether excusable neglect has been shown is a question of law — not of fact. Land Co. v. Wooten, 177 N.C. 248, 98 S.E. 706 (1919); Equipment, Inc. v. Lipscomb, 15 N.C. App. 120, 189 S.E. 2d 498 (1972). Based on the facts found by the trial court, an appellate court must determine, as a matter of law, whether defendant’s actions constitute excusable neglect.
While there is no clear dividing line as to what falls within the confines of excusable neglect as grounds for the setting aside of a judgment, what constitutes excusable neglect depends upon what, under all the surrounding circumstances, may be reasonably expected of a party in paying proper attention to his case. Dishman v. Dishman, 37 N.C. App. 543, 246 S.E. 2d 819 (1978). Excusable neglect must have occurred at or before entry of judgment and must be the cause of the default judgment being entered. Norton v. Sawyer, 30 N.C. App. 420, 227 S.E. 2d 148, cert. denied, 291 N.C. 176, 229 S.E. 2d 689 (1976).
A close examination of the facts herein discloses that defendant’s actions were reasonable under the surrounding circumstances. Defendant did not respond to the complaint upon the assurance by her husband that the matter had been resolved by payment of the judgment in the first action and that there was no necessity to respond. Defendant was aware that the prior action against her husband was based upon the very auction contract on which she was being sued and that her husband paid $7,964.29 to satisfy the judgment entered against him in that action. Defendant was also aware that this payment by her husband was not made until three days after the filing of the complaint in the second action and three days prior to service upon her of the summons. Under these circumstances, it seems quite reasonable for defendant to have concluded that in suing her, plaintiff was only [426]*426trying to get payment of the judgment in the first action, that payment of this judgment by her husband resolved all controversy, and that there was no need to respond to the complaint.
Defendant cites Trucks, Inc. v. Greene, 34 N.C. App. 279, 237 S.E. 2d 862 (1977), and Gregg v. Steele, 24 N.C. App. 310, 210 S.E. 2d 434 (1974), as authority in support of the trial court’s finding of excusable neglect. Both cases rely upon an opinion of this Court, Abernathy v. Nichols, 249 N.C. 70, 105 S.E. 2d 211 (1958), in which it is said that:
[T]his Court has held that under G.S. 1-220 [since repealed; now N.C.G.S. § 1A-1, Rule 60(b)(1)] a wife’s failure or neglect to file answer in a suit against her and her husband, upon assurances by her husband that he will be responsible for and assume the defense of the action, is excusable neglect.
Abernathy, 249 N.C. at 72, 105 S.E. 2d at 213.
Plaintiff contends that there is a difference between a husband’s assurance to his wife that he will take care of the matter and take action and a husband’s assurance to his wife that he has already taken care of the matter so that no action need be taken. However, this Court agrees with the unanimous panel of the Court of Appeals which declined to make such a fine distinction. Instead, we hold that the principle above stated is applicable to the present case.
Plaintiff further contends that to hold that Mrs. Hall’s actions constitute excusable neglect is to hold as a general proposition that if a defendant wife seeks the legal advice of her husband and the legal advice proves to be erroneous, the wife can raise the erroneous legal advice given to her by her husband as excusable neglect on her part. Our decision should not be so broadly construed. Instead, we narrowly interpret the trial court’s ruling, upheld by the Court of Appeals, to mean that under the circumstances surrounding this case it was not unreasonable for Mrs. Hall to rely on her husband’s assurance that the matter had been taken care of and thus that her actions constitute excusable neglect.
II.
Turning now to defendant’s appeal, we must next determine whether the trial court erred in concluding that defendant does [427]*427not have a meritorious defense. Defendant contends that plaintiff should not be permitted to recover in a second action interest from the date of breach which was denied to it in a previous action. As a legal basis for her contention, defendant rests her argument on the principles of collateral estoppel.
The companion doctrines of res judicata and collateral estoppel have been developed by the courts of our legal system during their march down the corridors of time to serve the present-day dual purpose of protecting litigants from the burden of relitigating previously decided matters and of promoting judicial economy by preventing needless litigation. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326, 58 L.Ed. 2d 552, 559 (1979). The “classic” American case, IB Moore’s Federal Practice § 0.441[1] at 718-19 (2d ed. 1984), defining these two doctrines and illustrating the differences between them is the United States Supreme Court’s decision in Cromwell v. County of Sac, 94 U.S. 351, 24 L.Ed. 195 (1877). Justice Field, writing for the Court, described the two as follows:
In considering the operation of [a prior] judgment it should be borne in mind, as stated by counsel, that there is a difference between the effect of a judgment as a bar or estoppel against the prosecution of a second action upon the same claim or demand, and its effect as an estoppel in another action between the same parties upon a different claim or cause of action. In the former case, the judgment, if rendered upon the merits, constitutes an absolute bar to a subsequent action. It is a finality as to the claim or demand in controversy, concluding parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose ....
But where the second action between the same parties is upon a different claim or demand, the judgment in the prior action operates as an estoppel only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered. In all cases, therefore, where it is sought to apply the estoppel of a judgment rendered upon one cause of action to matters arising in a suit upon a different cause of action, the inquiry must always be [428]*428as to the point or question actually litigated and determined in the original action; not what might have been thus litigated and determined. Only upon such matters is the judgment conclusive in another action.
Id. at 352-53, 24 L.Ed. at 197-98. Although the names used by courts when referring to Justice Fields’ two “effects” have varied over time, the term “res judicata!' is frequently applied to the former and the term “collateral estoppel,” to the latter. See IB Moore’s Federal Practice § 0.405[1] at 180 (2d ed. 1984); J. Friedenthal, M. Kane & A. Miller, Civil Procedure 606-09 (1985).1 We shall use these terms in this sense in this opinion.
Thus, under res judicata as traditionally applied, a final judgment on the merits in a prior action will prevent a second suit based on the same cause of action between the same parties or those in privity with them. When the plaintiff prevails, his cause of action is said to have “merged” with the judgment; where defendant prevails, the judgment “bars” the plaintiff from further litigation. In either situation, all matters, either fact or law, that were or should have been adjudicated in the prior action are deemed concluded. See Restatement (Second) of Judgments § 18, 19 (1982); IB Moore’s Federal Practice § 405[1] at 181-85 (2d ed. 1984). Under collateral estoppel as traditionally applied, a final judgment on the merits prevents relitigation of issues actually litigated and necessary to the outcome of the prior action in a later suit involving a different cause of action between the parties or their privies. See Restatement (Second) of Judgments § 27 [429]*429(1982);2 IB Moore’s Federal Practice § 0.441[1] at 718 (2d ed. 1984). Traditionally, courts limited the application of both doctrines to parties or those in privity with them by requiring so-called “mutuality of estoppel”: both parties had to be bound by the prior judgment. See Bernhard v. Bank of America, 19 Cal. 2d 807, 122 P. 2d 892 (1942).
North Carolina currently recognizes both doctrines in their traditional guise. See King v. Grindstaff, 284 N.C. 348, 200 S.E. 2d 799 (1973). Therefore, for res judicata to apply, Mrs. Hall would need to show that the previous suit resulted in a final judgment on the merits, that the same cause of action is involved, and that both she and Mclnnis were either parties or stand in privity with parties. However, because in this State contracts joint in form are several in legal effect, the same cause of action is not involved. See Rufty v. Claywell, 93 N.C. 306 (1885); N.C.G.S. § 1-72 (1983). Accordingly, res judicata cannot apply in the present action.
For Mrs. Hall to assert a plea of collateral estoppel under North Carolina law as traditionally applied, she would need to show that the earlier suit resulted in a final judgment on the merits, that the issue in question was identical to an issue actually litigated and necessary to the judgment, and that both she and Mclnnis were either parties to the earlier suit or were in privity with parties. See King v. Grindstaff, 284 N.C. 348, 200 S.E. 2d 799. Defendant argues that she meets all of these requirements; plaintiff contests defendant’s claim only as to the last requirement. We find that Mrs. Hall meets every requirement but the last.
First, the prior suit resulted in a judgment on the merits.
Second, identical issues are involved. In its suit against Mr. Hall, plaintiff sought and failed to obtain interest on its commission from the date of sale. In the instant suit, plaintiff seeks again [430]*430to recover interest on its commission (the same commission) from the date of sale.
Third, the issue was actually litigated. Plaintiff initially requested interest from the date of sale in its pleading. The issue was later raised before the trial judge; plaintiff specifically requested an award of interest from the date of sale. Plaintiff argued before the judge that it was entitled to this interest as a matter of law.
Fourth, the issue was actually determined. The trial court in the instant case found as a fact that:
i. No issue was submitted to the jury, and nor was any such issue requested, and nor was the jury charged concerning interest on the Mclnnis and Hall contract and the Presiding Judge declined to grant interest from the day of breach of the contract as a matter of law, he expressing the opinion that the question of interest on the breach of contract was a jury question and had consequently been waived in the absence of a timely request that an issue concerning interest be submitted to the jury; Mclnnis contended that interest was payable from the day of breach as a matter of law.
(Emphasis added.) Essentially, then, after the jury rendered its verdict, Mclnnis requested an award of interest from the date of sale. In making this request, Mclnnis claimed to be entitled to interest from that date as a matter of law. The trial judge, however, “declined to grant interest from the day of breach of the contract as a matter of law.” The judge thereby made a determination that Mclnnis was not entitled to interest from the date of sale (the date of the breach) as a matter of law. His basis for making this determination was his opinion that prejudgment interest is a question of fact and had therefore been waived, but his determination, made in response to Mclnnis’ claim, was that Mclnnis was not entitled to the requested interest as a matter of law.-
Lastly, this determination was necessary to the resulting judgment. The trial court in the instant case also found as a fact that:
[431]*431h. Judgment was entered by the Judge Presiding in favor of Mclnnis and against Hall for the $7,800.00, with interest to run thereon from the day of Judgment.
(Emphasis added.) Mclnnis raised and argued the issue of interest on the jury’s award from the date of sale in the prior action, but the judge awarded interest only from the date of judgment.
In fact, the judge in the earlier action erred. Where the amount of damages for a breach of contract is ascertainable from the contract itself, the prevailing party is entitled as a matter of law to interest from the date of the breach. See Investment Properties v. Allen, 281 N.C. 174, 188 S.E. 2d 441 (1972), rev’d on other grounds, 283 N.C. 277, 196 S.E. 2d 262 (1973); Thomas v. Realty Co., 195 N.C. 591, 143 S.E. 144 (1928); see also T. C. Allen Construction Co. v. Stratford Corp., 384 F. 2d 653 (4th Cir. 1967) (applying North Carolina law). Cf. Noland Co. v. Poovey, 54 N.C. App. 695, 282 S.E. 2d 813 (1981), cert. denied, 304 N.C. 728, 288 S.E. 2d 808 (1982).3 The jury verdict in the prior action confirmed the existence of the auction contract, established that it was breached by Mr. Hall, and awarded Mclnnis the commission fixed by the contract. Once these facts were established, Mclnnis’ entitlement to interest from the date of sale was a question of law properly within the province of the trial judge, not a question of fact for the jury, and the auctioneering company did not waive this question by failing to request a jury instruction on the issue.
Nevertheless, the fact that a prior judgment was based on an erroneous determination of law or fact does not as a general rule prevent its use for purposes of collateral estoppel. As this Court held several years ago in King v. Grindstaff, 284 N.C. 348, 360, 200 S.E. 2d 799, 808,
To be valid a judgment need not be free from error. Normally no matter how erroneous a final valid judgment may be on either the facts or the law, it has binding res judicata and collateral estoppel effect in all courts, Federal and State ....
[432]*432Because the trial judge did make a determination that Mclnnis was not entitled to interest from the date of sale as a matter of law, and because that determination was necessary to support the award actually made, Mclnnis may be bound by this determination despite the fact that it was erroneous. The normal method for obtaining relief from judgments flawed by error of law is through appeal to our appellate courts. Plaintiff Mclnnis had the opportunity to have the trial judge’s erroneous determination corrected in this manner. It failed to do so. Therefore, it may properly be bound by the earlier judge’s determination that it was not entitled to prejudgment interest on this particular commission.
However, the final traditional requirement of mutuality of estoppel is unsatisfied. Although Mclnnis was a party to the earlier action, our Court of Appeals has correctly ruled that Mrs. Hall was not in privity with her husband, the other party in that action. Under North Carolina law as heretofore applied, collateral estoppel would not be available to her for failure to meet the mutuality requirement.
The modern trend in both federal and state courts is to abandon the requirement of mutuality for collateral estoppel,4 subject to certain exceptions, as long as the party to be collaterally es-topped had a full and fair opportunity to litigate the issue in the earlier action. IB Moore’s Federal Practice § 0.441[3.2] at 731-36 (2d ed. 1984 and Supp. 1985-86); see also Blonder-Tongue Laboratories v. University of Illinois Foundation, 402 U.S. 313, 28 L.Ed. 2d 788 (1971) (discussion) and Restatement (Second) of Judgments § 29 (1982 and Supp. 1985-86). The requirement of mutuality has long been under attack. In the 1800’s, Jeremy Bentham denounced it as “ ‘a maxim which one would suppose to have found its way from the gaming-table to the bench,’ ” Zdanok v. Glidden Co., 327 F. 2d 944, 954 (2d Cir.), cert. denied, 377 U.S. 934, 12 L.Ed. 2d 298 (1964) (quoting Bentham, Rationale of Judicial [433]*433Evidence, in 7 Works of Jeremy Bentham 171 (J. Bowing ed. 1843)) (meaning that the maxim displays an attitude of “lose against one, play again against another”). After a series of judicial erosions, it was finally first abandoned, at least for “defensive” uses of collateral estoppel, in the landmark case of Bernhard v. Bank of America, 19 Cal. 2d 807, 122 P. 2d 892 (1942).
Other states followed Bernhard’s lead until in 1967 the New York Court of Appeals felt itself able to say, “[T]he ‘doctrine of mutuality’ is a dead letter.” B. R. DeWitt, Inc. v. Hale, 19 N.Y. 2d 141, 147, 225 N.E. 2d 195, 198, 278 N.Y.S. 2d 596, 601 (1967). In 1971, the United States Supreme Court joined the trend and held in Blonder-Tongue Laboratories v. University of Illinois Foundation, 402 U.S. 313, 28 L.E. 2d 788, that mutuality would no longer be required for defensive uses of collateral estoppel in Federal courts. Later, in Parklane Hosiery Co. v. Shore, 439 U.S. 322, 58 L.E. 2d 552, the Court extended its earlier holding to permit carefully controlled “nonmutual offensive” use as well. But see United States v. Mendoza, 464 U.S. 154, 78 L.Ed. 2d 379 (1984) (where the Court refused to allow nonmutual offensive collateral estoppel against the Federal Government). Commentators appear to be in agreement that most jurisdictions have abandoned the mutuality requirement at least in part. See Restatement (Second) of Judgments § 29, Reporter’s Note (1982 and Supp. 1985-86); Flanagan, Offensive Collateral EstoppelInefficiency and Foolish Consistency, 1982 Ariz. St. L.J. 45; Schroeder, Relitigation of Common Issues: The Failure of Nonparty Preclusion and an Alternative Proposal, 67 Iowa L. Rev. 917 (1982); Callen & Kadue, To Bury Mutuality, Not to Praise It: An Analysis of Collateral Estoppel After Parklane Hosiery Co. v. Shore, 31 Hastings L.J. 755 (1980); Note, Collateral Estoppel Without Mutuality: Accepting the Bernhard Doctrine, 35 Vand. L. Rev. 1423 (1982).
The basic rationale behind this abandonment was succinctly expressed by Traynor, J., writing for the Supreme Court of California in Bernhard. Judge Traynor first noted that the criteria for determining who might assert a plea of collateral estoppel differed fundamentally from the criteria for determining against whom the plea might be asserted. The requirements of due process forbade the assertion of a plea of collateral estoppel against a litigant unless he was a party or in privity with a party to the earlier suit, but no comparable reason existed for requiring [434]*434that the litigant asserting the plea be bound by the former adjudication. Bernhard, 19 Cal. 2d at 811-13, 122 P. 2d at 894-95. Traynor therefore concluded that there was no satisfactory rationalization for permitting “one who has had his day in court to reopen identical issues by merely switching adversaries.” Bernhard, 19 Cal. 2d at 813, 122 P. 2d at 895. More recently, the United States Supreme Court in Blonder-Tongue explained, “the question is whether it is any longer tenable to afford a litigant more than one full and fair opportunity for judicial resolution of the same issues.” Blonder-Tongue, 402 U.S. at 328, 28 L.Ed. 2d at 799. See also Parklane Hosiery Co. v. Shore, 439 U.S. 322, 58 L.Ed. 2d 552.
We are presented in the instant case with a proposed defensive use of the doctrine of collateral estoppel, and we see no good reason for continuing to require mutuality of estoppel in cases like this case. Plaintiff Mclnnis has already had its day in court on the issue it now seeks to relitigate against Mrs. Hall. Plaintiff seeks now to augment the award rendered by the prior court. The issue here is identical to the one decided in the prior case. Both actions are based on the same breach of contract, under which Mrs. Hall’s obligations were exactly the same as her husband’s. On the record before this Court, plaintiff clearly had a full and fair opportunity to litigate this issue in the first action. Plaintiff did not appeal the adverse determination and the judgment became final.
We have said before that collateral estoppel “is designed to prevent repetitious lawsuits over matters which have once been decided and which have remained substantially static, factually and legally.” King v. Grindstaff, 284 N.C. 348, 356, 200 S.E. 2d 799, 805. See also Crossland-Cullen Co. v. Crossland, 249 N.C. 167, 170, 105 S.E. 2d 655, 657 (1958) (“It is elementary and fundamental that every person is entitled to his day in court to assert his own rights or to defend against their infringement .... But public policy is equally as adamant in its demand for an end to litigation when complainant has exercised his right . . . .”). We believe that, at least in cases like the instant case, the better view is to allow defendants like Mrs. Hall to assert collateral estoppel as a defense against a party who has previously had a full and fair opportunity to litigate a matter and now seeks to reopen the identical issues with a new adversary. Allowing a defensive use of [435]*435collateral estoppel in such cases will relieve parties from the cost and vexation of multiple lawsuits, encourage joinder, promote judicial economy, and, as the United States Supreme Court has said, “by preventing inconsistent decisions, encourage reliance on adjudication,” Allen v. McCurry, 449 U.S. 90, 94, 66 L.Ed. 2d 308, 313 (1980).
Although defendant argued before this Court that she was in privity with her husband, she concluded her argument by requesting in essence that this Court adopt an expansive application of collateral estoppel. She said,
It would be unjust and a waste of courts’ time to permit one who has had its day in court (Mclnnis) to reopen identical issues by merely switching adversaries. Under the doctrine of collateral estoppel, the plaintiff should be unable to augment an award which was rendered by a prior court in a case in which it was a party by institution of a second action on the very question decided by the prior court. The doctrine of collateral estoppel was intended with this very result in mind, and inapplicability of this doctrine to circumstances such as the ones presently before us considerably limits this doctrine.
We therefore hold that defendant may assert the prior judgment as a defense to the present action and that, in this case, collateral estoppel constitutes a meritorious defense. That portion of the decision of the Court of Appeals which affirmed the trial court’s denial of defendant’s motion to set aside the default judgment for lack of a meritorious defense is reversed and the cause remanded to the Court of Appeals for further remand to the District Court, Richmond County, for further proceedings not inconsistent with this opinion.
Affirmed in part, reversed in part, and remanded.
Justices Parker and Browning did not participate in the consideration or decision of this case.