I INTRODUCTION

Businesses entering into agreements in the United States require a working knowledge of the fundamentals of contract law, which can be subject to the laws of one or more of the 50 US states.2 Contract law in New York in particular, however, is especially important for attorneys and their clients to know. Since its founding in the 1600s, New York City is one of the premier centres of economic, financial and commercial activity in the United States, as well as the world. As such, New York has one of the most developed and well-respected comprehensive bodies of commercial and contract law – one that is balanced, stable, predictable and respectful of party autonomy. New York's contract laws are often adopted by many other US states, and parties frequently select its laws to govern their contractual relationships. What follows is an overview of the key concepts in New York contract law, starting with how legally binding contracts are formed, how they are interpreted and how parties may establish ground rules for resolving disputes.

II CONTRACT FORMATION

i Basic elements

The elements of an enforceable contract in New York are 'an offer, acceptance of the offer, consideration, mutual assent, and an intent to be bound'.3 A binding contract exists where 'there is a sufficiently definite offer such that its unequivocal acceptance will give rise to an enforceable contract'.4 'An offer not given for consideration may be revoked at any time.'5 The price itself is also considered a key term of the contract.6

Acceptance must track the offer's terms and be 'clear, unambiguous and unequivocal'.7 An acceptance that is 'qualified with conditions' constitutes a rejection.8 Although silence is not sufficient to indicate acceptance, a counter-offer can be accepted by a party's conduct. Thus, a party that, upon receiving a counter-offer, begins performing in accordance with that counter-offer, may be found to have demonstrated its intent to accept the terms of that counter-offer.9 Moreover, where a party has an 'opportunity and duty to speak, failure to speak may constitute an assent'.10

Consideration must support all contracts. New York law requires either a benefit to the promisor or a detriment to the promisee, although the consideration does not necessarily have to be provided contemporaneously.11 Consideration is a benefit and forms the primary reason for a party's entrance into a contract. At the same time, a mere promise to perform some action can form the basis of consideration.12 However, the promise by a party to perform some action must entail some kind of detriment to that party. New York courts have found that contracts that offer consideration while also maintaining a way to escape detriment do not qualify as consideration.13

An option contract 'is an agreement to hold an offer open', and grants the optionee the right to purchase or sell at a later date.14 The party exercising the option must act in the 'manner specified in the option'.15 Options, such as a right of first offer and right of first refusal, are enforceable under New York law.16

ii Oral contracts

Contracts can be formed orally, but will not be enforced if they violate the statute of frauds. Under New York law, a writing is required for any agreement that '[b]y its terms is not to be performed within one year from the making thereof or the performance of which is not to be completed before the end of a lifetime'.17 However, 'New York courts generally construe the statute of frauds narrowly', only voiding oral contracts for which full performance cannot be completed within one year.18 If an agreement falls under the statute of frauds, the writing must contain the agreement's material terms, such as the agreement's duration.19 New York law recognises that electronic signatures and emails may constitute a writing sufficient to satisfy the statute of frauds.20 New York courts often find that emails form enforceable agreements provided that the emails include all of the agreements' essential terms.21

Although New York courts have traditionally accepted promissory estoppel as an alternative contract theory, the Court of Appeals (New York's highest court) recently limited the theory by invoking the statute of frauds. The Court of Appeals held that, where an agreement would be subject to the statute of frauds, in addition to the elements of promissory estoppel, a plaintiff would also have to show that enforcing the statute of frauds would result in an 'unconscionable' injury.22 The court clarified that the standard for unconscionability in this context was the same used to declare a contract void.23 However, the parties wishing to ensure they have an enforceable agreement should normally reduce their agreement to writing whenever possible.

iii Modifications

Generally, New York law will enforce written modifications to a contract that are executed by both parties. However, New York law enforces 'no oral modification' clauses in contracts more strictly than many other jurisdictions in the United States. New York statutorily mandates that no-oral-modification clauses in contracts must be enforced, and contract terms generally cannot be modified unless the parties' performance unequivocally demonstrates their assent to the alleged oral modification.24 One New York appellate court recently explained that it faced situations wherein 'one party to a contract wrongly presumes, based on past practice, that an oral modification will be sufficient [to modify the contract]'.25 That court held that, for the real estate contract at issue, the seller was entitled to terminate the contract after the buyer missed the closing date, incorrectly relying on an alleged oral modification to adjourn.26

III CONTRACT INTERPRETATION

i Fundamentals of contract interpretation

The threshold question governing contract interpretation is whether a contract is ambiguous. If a contract is found to be clear and unambiguous, New York courts will strictly enforce the contract 'according to the plain meaning of its terms'.27 A contract will be considered unambiguous if the language has 'no reasonable basis for a difference of opinion'.28 New York's Court of Appeals has long held that:

[W]hen parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms. Evidence outside the four corners of the document as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing . . . That rule imparts 'stability to commercial transactions by safeguarding against fraudulent claims, perjury, death of witnesses . . . infirmity of memory . . . [and] the fear that the jury will improperly evaluate the extrinsic evidence.29

This is commonly referred to as the parol evidence rule.

The question of whether a contract is ambiguous is a legal one for a court to decide.30 If the contract is ambiguous, a court will consider evidence of what the parties intended the ambiguous provision of the contract to mean.31 Such evidence may take the form of exchanged drafts of contracts, communications between the parties, common definitions or industry-specific usage of the terms, but generally courts will not consider the subjective intent of a party that was not communicated to the other side before the contract was executed.32 Generally, New York courts are inclined to stringently apply the parol evidence rule when commercial contracts are negotiated by sophisticated businesspeople.33

New York courts will follow additional rules to aid in the interpretation of contracts. For example, it is a basic principle of contract interpretation that a court should 'examine the contract as a whole and interpret its parts with reference to the whole'.34 Courts must also avoid interpretations that 'render contract provisions meaningless or superfluous'.35 Another canon of construction provides that where 'there is an inconsistency between a specific provision and a general provision of a contract . . . the specific provision controls'.36 Parties should consider these kinds of interpretation rules carefully when drafting their agreements.

IV BREACH OF CONTRACT37

Under New York law, a party establishes a breach of contract where it proves the existence of a valid contract, breach by the other party, that the non-breaching party fully performed its obligations and that the non-breaching party sustained damage as a result of the breach.38 The non-breaching party must demonstrate that the other party committed a material breach of the contract.39 A breach is material if it deprives 'the injured party of the benefit it justifiably expected' under the contract.40 Conversely, '[i]f the party in default has substantially performed, the other party's performance is not excused'.41

Courts will look at several factors to determine whether substantial performance has occurred, including the amount of performance completed, the magnitude of the default, whether the purpose of the contract has been frustrated and whether the non-breaching party has received a substantial benefit of the contract.42

In New York, parties to a contract are also bound by the implied duty of good faith and fair dealing.43 This common law principle is intended to address situations where 'there is not a breach of contract, but where one party has attempted to undermine the contract or deprive the other of the benefit of the bargain'.44 Despite the fact that New York generally recognises the covenant of good faith and fair dealing, courts have presented conflicting signals when applying the doctrine to contracts that afford one party sole discretion to take or refrain from taking a particular action. For example, some New York courts have held that the covenant is not violated if a party chooses to exercise its contractual right to 'terminate the contract “in its sole discretion” and for “any reason whatsoever”',45 while other courts in New York have allowed claims to proceed notwithstanding such language.46 Whether the covenant was allegedly breached, however, often is fact-specific and dependent on the nature of the act that violated it. As a general rule, courts are more likely to find a party breached an express term of an agreement rather than the implied covenant of good faith.

Anticipatory breach or repudiation of a contract is a breach 'that occurs before performance by the breaching party is due'.47 An anticipatory breach can be a statement by the repudiating party to the non-repudiating party that the former will breach, or a 'voluntary affirmative act' rendering the repudiator unable to perform without breach.48 The repudiator's expression of intent not to perform must be 'positive and unequivocal'.49 When faced with an anticipatory repudiation, the non-repudiating party may elect to:

  1. 'treat the repudiation as an anticipatory breach and seek damages for breach of contract'; or
  2. 'continue to treat the contract as valid and await the designated time for performance before bringing suit'.50

V Defences to enforcement

There are also a number of defences that may be available to a defendant facing a breach of contract claim. The reader should be cautioned, however, that New York courts are generally reluctant to set aside the terms of a contract that parties have willingly entered.51 Unfavourable terms or terms that lead to inequitable performances are insufficient bases for courts to rewrite the contract.52 To avoid enforcement of contractual obligations or defend against a claim of breach, a party in New York generally must demonstrate that the terms were not sufficiently definite or agreed to, unless there is some other defence.

i No enforceable contract was formed

To be enforceable, a contract must contain definite assent and include clear, material terms. New York courts have determined that a mere 'agreement to agree' without material terms is unenforceable.53 However, courts have found enforceable a contract that contemplates a future, more detailed agreement if the material terms of that agreement are set forth, and it can be reasonably inferred from the contract that the parties intended to be bound by it.54 Courts also will enforce clauses in preliminary agreements such as memoranda of understanding regarding confidentiality and exclusive negotiation periods.55

ii Limitation period unenforceable

The statute of limitations to assert a breach of contract claim in New York is six years.56 '[A] breach of contract cause of action accrues at the time of the breach.'57 Parties to a contract may, however, agree to a shorter time period within which a claim must be asserted.58 Even if sophisticated parties have agreed to terms that are plainly stated in the agreement, New York courts may deem unenforceable a contract with an unreasonable limitation period.59 However, if the limitations period is clear and unambiguous, is not derived from a contract of adhesion or overreaching and is not unreasonably short, New York courts may enforce the contractual limitation period.60

iii Lack of consideration

As explained above, agreements must contain consideration to be enforceable.61 Though the lack of the presence of consideration may be used as a basis to dispute contract enforcement, the adequacy of the substance of that consideration is generally not reviewable, and New York courts will hold parties to the terms of the contract even where the consideration is heavily disproportionate.62

iv Enforcement is contrary to public policy

New York courts will not enforce contracts that are contrary to the public policies of New York.63 Public policy is to be determined by reference to 'laws and legal precedents' rather than 'general considerations of supposed public interests'.64 Contracts that are contrary to public policy include contracts allowing a contracting party to benefit from a criminal enterprise65 or contractual choice-of-law provisions applying foreign laws that are 'truly obnoxious'.66 'Further, as a general rule, illegal contracts are unenforceable.'67 However, New York courts typically endeavour to protect the clear and unambiguous terms of a mutual contract, and the burden to prove that public policy would be violated by the enforcement of a contract is high.68

v Duress

Although New York courts generally enforce contracts with clear terms, it will not do so if those terms were made while one party was under duress. Although duress is often asserted where the defendant is an individual, 'economic duress' can also be a viable defence to enforcement of a contract when asserted by businesses as well.69 Economic duress arises when 'one party has unjustly taken advantage of the economic necessities of another and thereby threatened to do an unlawful injury'.70 However, if a party voluntarily entered into a payment agreement with 'full knowledge of the facts and in the absence of fraud or mistake of material fact or law', courts may decline to find duress and instead require enforcement under the voluntary payment doctrine.71

vi Impossibility or impracticality72

'[I]mpossibility excuses a party's performance only when the destruction of the subject matter of the contract or the means of performance makes performance objectively impossible. Moreover, the impossibility must be produced by an unanticipated event that could not have been foreseen or guarded against in the contract.'73 Generally, the impossibility defence is limited to situations where the means of performance is destroyed, such as through an 'act of God', or by law.74

For example, a governmental order preventing a party from performing will typically constitute sufficient grounds for impossibility.75 In addition, in the residential mortgage-backed securities context, New York courts have found that where equitable relief is the only remedy provided for in the contract, a court may award damages where equitable relief is impracticable or impossible.76 However, New York courts have also found that parties cannot avoid enforcement where impossibility arises from 'financial difficulty or economic hardship'.77

vii Frustration of purpose

The doctrine of frustration of purpose 'offers a defence against enforcement of a contract when the reasons for performing the contract cease to exist due to an unforeseeable event which destroys the reasons for performing the contract'.78 A New York court may consider the purpose of an agreement to be frustrated where the purpose goes to the core of the contract, and without it the agreement makes little sense.79 Under New York law, a court will not excuse a party from a contract merely because performance has become an economic burden.80 For example, frustration of purpose did not apply to enforcement of a commodity swap contract following a commodity price increase because protections against instability in commodity prices were the very thing that induced the parties to enter into the contract in the first place.81

VI FRAUD, MISREPRESENTATION AND OTHER CLAIMS IMPACTING CONTRACTS

A party to a contract can also attack the enforcement of a contract if it was the product of fraud, such as when one party induced the other to enter into the contract by making material misrepresentations. Generally, fraud must be proved by the party seeking relief by clear and convincing evidence.82

A party invoking fraud as a defence in the execution of a contract must show 'excusable ignorance'.83 If the party is ignorant because, for example, its executives failed to read the contract prior to agreement and cannot provide a sufficient excuse for why it failed to read that contract, New York courts will likely consider the party bound to the terms that it expressly agreed to in the document.84 However, if the signing of the contract was induced by fraud, it is unenforceable by the party that perpetrated the fraud.85 A fraudulent inducement claim is valid, and enforcement of a contract may be voided under New York contract law if the party can prove:

  1. a false representation of a material fact was made with the intent to reduce reliance; and
  2. the party claiming to have been defrauded reasonably relied on that fact and suffered damage as a result.86

When determining whether a party reasonably relied on a representation, New York courts may hold sophisticated parties and business entities to a higher standard.87 However, such parties can sometimes establish justifiable reliance on a misrepresentation if they demonstrate they had no reason to doubt the misrepresentation and reasonable diligence would not have uncovered it.88 Parties to contracts governed by New York law can also enhance their chances of successfully opposing claims of misrepresentation if the agreements contain specific anti-reliance disclaimers.89 General merger clauses (which foreswear the existence of any terms outside of the existing contract, all of which are deemed to 'merge' into the final contract) or generic statements of no reliance will not be sufficient to do so, however.90 Further, if the disputed information was not 'peculiarly' known by the party allegedly perpetuating the fraud and could have been discovered by ordinary diligence, then New York courts will be disinclined to excuse performance of the contract, which is an exception to the enforcement of a specific anti-reliance disclaimer clause as well.91 In addition, 'where a party is merely seeking to enforce its bargain, a [fraud] claim will not lie'.92 Thus, if a party alleging fraudulent inducement only demonstrates facts that establish a failure to perform, New York courts may find that its fraudulent inducement claim is merely duplicative of its breach claim such that it cannot succeed.93

VII DISPUTE RESOLUTION

i Contractual provisions regarding forum selection

Under New York law, forum selection clauses are prima facie valid and '[i]t is the policy of the courts of this State to enforce contractual provisions for choice of law and selection of a forum for litigation.'94 A party cannot defeat a forum selection clause by resorting to an 'artful pleading of claims not based on the contract containing the clause if those claims grow out of the contractual relationship, or if the gist of those claims is a breach of that relationship'.95 A non-party closely related to the contracting parties could also be bound by a forum selection clause.96

Courts typically conduct a four-part analysis to determine whether to dismiss a claim based on a forum selection clause: (1) 'whether the clause was reasonably communicated to the party resisting enforcement'; (2) 'whether the parties are required to bring any dispute to the designated forum or simply permitted to do so'; (3) 'whether the claims and parties involved in the suit are subject to the forum selection clause'; and (4) 'whether the resisting party has rebutted the presumption of enforceability by making a sufficiently strong showing that enforcement would be unreasonable or unjust, or that the clause was invalid for such reasons as fraud or overreaching'.97

New York law specifically permits parties to designate New York State Courts – including the Commercial Division, a division of the state's courts specialising in commercial litigation matters – to be their selected forum of choice in which to resolve disputes. Section 5-1401 of New York's General Obligations Law (GOL) states that parties to a contract may agree that New York law will govern the contract so long as the transaction involves at least US$250,000.98 Section 5-1402 provides that a contract action may be brought in New York against a foreign individual or corporation if the contract contains a New York choice-of-law clause both parties submit to New York jurisdiction, so long as the transaction involves at least US$1 million.99 In conjunction, these statutes allow parties otherwise lacking New York contacts to select New York law to govern their contract and to litigate in New York courts.100 Additionally, if an agreement falls within GOL Section 5-1402, then a related action will not ordinarily be subject to a forum non conveniens dismissal.101

To bring a case in New York's Commercial Division, a claim must first meet the monetary threshold. For example, in New York County (Manhattan) a claim must be valued at a minimum of US$500,000.102 Once this threshold is reached, the jurisdiction of the Commercial Division includes claims involving securities transactions, business sales, breach of fiduciary duty, breach of contract, trade secrets, shareholder derivative actions, fraud, business torts and other statutory violations involving business dealings.103 Parties can also choose to select an expedited dispute resolution process, where trial will take place within nine months of when the judge first is involved in the case.104

ii Contractual agreements to resolve disputes through alternative dispute resolution

New York law provides that a written agreement to submit a dispute to arbitration is 'enforceable without regard to the justiciable character of the controversy' and 'confers jurisdiction on the courts of the state to enforce it and to enter judgment on an award'.105 New York courts will also enforce obligations to participate in mediation if the parties' agreement so requires, and stay court actions pending arbitration of the dispute.106 Under New York law, a party seeking to compel an unwilling party to arbitrate must show a 'clear and unequivocal' agreement to arbitrate.107 In addition, while arbitration provisions are typically severable from an agreement that contains elements otherwise voided by fraud, a court will find an arbitration clause void if a party can show the fraud 'was part of a grand scheme that permeated the entire contract'.108 Notably, under New York statutory law, a party may seek a court order preventing arbitration if the asserted claim is time barred.109 Agreements containing alternative dispute resolution provisions may, however, also be subject to the Federal Arbitration Act, which will pre-empt New York law wherever the two are inconsistent.110

VIII REMEDIES

To prevail on a breach of contract claim a plaintiff generally must show damage caused by the breach.111 There are several categories of remedies available to a prevailing plaintiff in a breach of contract suit, and parties may also seek post-judgment interest in a breach of contract action.112 This section will discuss other remedies for breach of contract, including compensatory, consequential, punitive or exemplary monetary and liquidated damages; indemnification and limitations against indemnity; specific performance; rescission and reformation of contract; and limitations of liability.

i Compensatory damages

A non-breaching party generally can seek compensatory damages, which are an attempt to compensate for the injury suffered and make the party whole.113 To recover compensatory damages, a plaintiff must show the damages were a direct result of the defendant's conduct, and also show them with reasonable certainty.114

In addition to direct damages, a non-breaching party may recover consequential damages under New York law. Consequential damages generally are considered indirect, and are intended to compensate the non-breaching party for losses beyond the lost performance that results from the breach.115 One common example is lost profits.116 In order for a party to recover lost profits, it must demonstrate that the damage was caused by the breach, the loss can be proven with reasonable certainty and damages were contemplated by the parties.117 New York courts have classified lost profits as direct damages in instances where they are 'the direct and immediate fruits of the contract'.118

As an alternative to compensatory damages for a breach of contract, a plaintiff may seek to recover reliance damages. These include costs incurred while performing or preparing to perform, minus any costs the plaintiff would have incurred if the contract were fully performed.119 Reliance damages 'seek to restore the injured party to the position she was in before the contract was formed'.120

Parties to a contract are generally permitted to include a liquidated damages clause so long as 'the clause is neither unconscionable nor contrary to public policy'.121 An enforceable liquidated damages clause is grounded in the principle of 'just compensation for loss'; it is an estimate 'of the extent of the injury that would be sustained as a result of the breach'.122 A liquidated damages clause will be unenforceable if it functions as a penalty.123

ii Punitive damages

Under New York law, punitive or exemplary damages are typically non-recoverable for breach of contract.124 To state a claim for punitive damages, a plaintiff must show the defendant's conduct was independently tortious, it was egregious, directed at the plaintiff and part of a scheme directed at the general public.125 A plaintiff must also show that public rights are involved.126 Additionally, New York courts do not allow punitive damages to be awarded in arbitration.127

iii Indemnification

Parties may include contractual indemnification clauses in their agreements. For example, in the United States, each side generally pays its own attorney's fees. Some contracts contain indemnification provisions, where the winning side can be awarded attorney's fees. New York courts are 'distinctly inhospitable' to indemnification claims of this sort, and will not award fees unless the language is 'unmistakably clear'.128 However, a party may not seek indemnification for its own acts of gross negligence or willful misconduct under New York law.129

Even in the absence of an express contractual provision, indemnification may also be implied. Common law indemnity is a form of restitution that prevents one party to a contract from being unjustly enriched.130 A party seeking common law indemnification must show that he or she and 'the party from whom indemnity is sought have breached a duty to a third person', and that a 'duty to indemnify exists between them'.131

iv Specific performance

Specific performance is an equitable remedy where one party seeks that the other perform their end of the contract. Under New York law, a party seeking specific performance must show that it 'substantially performed its contractual obligations and was ready, willing and able to perform its remaining obligations'.132 In order to obtain this remedy, a party generally must also show that its remedies at law (i.e., money damages) are inadequate.133

A court may also enforce a contract by awarding injunctive relief. A party may seek a preliminary injunction where there would be a likelihood of irreparable harm without an injunction, as well as a likelihood of success.134 The injury must be 'neither remote nor speculative, but actual and imminent'.135 Under New York law, injury to reputation or loss of goodwill can establish irreparable harm.136

v Rescission and reformation

If a contract is induced by fraud, then rescission is an appropriate remedy.137 Rescission prevents the party who perpetrated the fraud from enforcing the contract.138 Under New York law, an intentional misrepresentation is not required for rescission, and an 'innocent misrepresentation' is typically sufficient.139

Reformation can be used to restate the terms of a contract in a way the parties originally intended.140 In New York, contracts are strictly construed against reformation.141 In order to base reformation of a contract on a claim of mistake, there must be 'either mutual mistake or mistake on one side induced by fraud on the other'.142

vi Limitations of liability

New York courts will generally uphold liability-limitation provisions, and this is particularly true where they are negotiated between sophisticated parties.143 Courts typically honour these provisions because they 'represent[ ]the parties' Agreement on the allocation of the risk of economic loss'.144 New York courts will generally enforce clauses excluding particular types of damages, such as punitive damages and consequential damages.145 As New York courts are inclined to enforce contracts with clear, agreed-upon terms, they will let parties 'lie on the bed they made', even if liability provisions may result in unfavourable results.146

Limited-liability clauses may be unenforceable if they allow for intentional wrongdoing, such as fraud.147 However, courts have declined to void a limitation of liability provision where the defendant acted in its legitimate economic self-interest, and there was no evidence of fraud or other bad acts in negotiating the agreement.148

ix CONCLUSION

As the foregoing discussion shows, New York law offers commercial parties a sophisticated and highly developed body of commercial law, which is often more robust and settled than other jurisdictions in the United States and other legal systems throughout the world. In multi-jurisdictional transactions, New York law can also provide uniformity and make the outcome of disputes more predictable, precisely because it recognises the sanctity of clear contractual terms that reflect the bargain made between commercial entities, unless there truly are valid reasons not to do so. For example, New York relies not just on case law, but has adopted statutes to assure that parties are entitled to rely on their clear, written agreements, which will not be subject to oral modifications, barring exceptional circumstances. Further, New York courts routinely enforce properly drafted anti-reliance disclaimers. For these reasons, parties can expect courts in New York to continue to apply a jurisprudence that ensures New York contract law's stability and consistency remains intact – a state of affairs that is not always the case in other jurisdictions in the United States.

New York courts continue to provide new and flexible ways for litigants to resolve disputes, such that practitioners should consider including clauses in their agreements selecting courts in New York's Commercial Division as their forum for resolving all disputes. The Commercial Division allows parties to opt in to expedited procedures if desirable, and ensure that judges with the requisite experience in commercial litigation will preside over their cases. Indeed, New York invites foreign parties to use its courts as a forum to resolve significant disputes when they designate New York courts and New York law to govern their agreements. In the end, parties are well served to adopt New York law to govern their commercial agreements and rely on New York courts to resolve their disputes.


Footnotes

1 Steven M Bierman and John J Kuster are partners at Sidley Austin LLP.

2 Generally, state law governs contract disputes in the United States, even in cases filed in federal court.

3 Civil Serv. Emps. Ass'n, Inc. v. Baldwin Union Free Sch. Dist., 84 A.D.3d 1232, 1233–34, (2d Dep't 2011).

4 Kolchins v. Evolution Markets, Inc., 31 N.Y.3d 100, 106 (2018).

5 Civil Serv. Emps., 84 A.D.3d at 1234.

6 See Garcete v. Lazar, 294 A.D.2d 118, 119 (1st Dep't 2002) ('[T]here was never any meeting of the minds as to the price, an essential term of any contract of sale.').

7 Kolchins v. Evolution Markets, Inc., 128 A.D.3d 47, 59, 60 (1st Dep't 2015), aff'd, 31 N.Y.3d 100 (2018).

8 Silber v. New York Life Ins. Co., 92 A.D.3d 436, 440 (1st Dep't 2012).

9 Gator Hillside Vill., LLC v. Schuckman Realty, Inc., 158 A.D.3d 742, 744 (2d Dep't 2018).

10 533 Park Ave. Realty, LLC v. Park Ave. Building & Roofing Supplies, LLC, 156 A.D.3d 744, 748 (2d Dep't 2017); see also Minelli Constr. Co. v. Volmar Constr., Inc., 82 A.D.3d 720, 722 (2d Dep't 2011) (holding general contractor accepted subcontractor's offer through 'acquiescent conduct').

11 See Reddy v. Mihos, 160 A.D.3d 510, 514–15 (1st Dep't 2018) (quoting Holt v. Feigenbaum, 52 N.Y.2d 291, 299 (1981) ('[C]onsideration for a promise may be “either a benefit to the promisor or a detriment to the promisee”.')); see also N.Y. Gen. Oblig. Law § 5-1105 ('A promise in writing and signed by the promisor or by his agent shall not be denied effect as a valid contractual obligation on the ground that consideration for the promise is past or executed, if the consideration is expressed in the writing and is proved to have been given or performed and would be a valid consideration but for the time when it was given or performed.').

12 See, e.g., Nassau Cty. v. New York State Urban Dev. Corp., 157 A.D.3d 805, 808 (2d Dep't 2018); Hollander v. Lipman, 65 A.D.3d 1086, 1087 (2d Dep't 2009).

13 See CARI, LLC v. 415 Greenwich Fee Owner, LLC, 91 A.D.3d 583, 583 (1st Dep't 2012) (termination provision allowing plaintiff to cancel agreement for any reason rendered contracts unenforceable for lack of 'mutual consideration').

14 IPE Asset Mgmt., LLC v. Fairview Block & Supply Corp., 123 A.D.3d 883, 885 (2d Dep't 2014).

15 Yeon v. Mehta, 134 A.D.3d 701, 701 (2d Dep't 2015).

16 See, e.g., Singh v. Turtle Bay Towers Corp., 74 A.D.3d 568, 568 (1st Dep't 2010) (finding cooperative corporation had enforceable right of first refusal).

17 N.Y. Gen. Obl. Law § 5-701(a).

18 Kroshnyi v. U.S. Pack Courier Servs., Inc., 771 F.3d 93, 110 (2d Cir. 2014).

19 Hadami, S.A. v. Xerox Corp., 272 F. Supp. 3d 587, 596–97 (S.D.N.Y. 2017).

20 The reader should note that although many jurisdictions in the United States have adopted the Uniform Electronic Transactions Act (UETA), which validates electronic contracts and records, including electronic signatures, New York has not done so. Naldi v. Grunberg, 80 A.D.3d 1, 9–13 (1st Dep't 2010).

21 Kasowitz, Benson, Torres & Friedman, LLP v. Duane Reade, 98 A.D.3d 403, 405 (1st Dep't 2012); Naldi v. Grunberg, 80 A.D.3d 1, 6–13 (1st Dep't 2010); Agosta v. Fast Sys. Corp., 46 Misc. 3d 1217(A), 2015 WL 523344, at *6 (N.Y. Sup. 2015), aff'd, 136 A.D.3d 694 (2d Dep't 2016).

22 Matter of Hennel, 29 N.Y.3d 487, 493 (2017).

23 Id. at 495.

24 Latin Events, LLC v. Doley, 120 A.D.3d 501, 501 (2d Dep't 2014).

25 Nassau Beekman LLC v. Ann/Nassau Realty LLC, 105 A.D.3d 33, 35 (1st Dep't 2013).

26 Id. at 39.

27 Bank of N.Y. Mellon v. WMC Mortg., LLC, 136 A.D.3d 1, 6 (1st Dep't 2015).

28 Selective Ins. Co. of Am. v. Cty. of Rensselaer, 26 N.Y.3d 649, 655 (2016).

29 W.W.W. Assocs., Inc. v. Giancontieri, 77 N.Y.2d 157, 162 (1990) (citations omitted); see also Schron v. Troutman Sanders LLP, 20 N.Y.3d 430, 436 (2013); Woolfolk v. N.Y.C. Bd./Dep't of Educ., 161 A.D.3d 643, 644 (1st Dep't 2018); Outstanding Transp., Inc. v. Interagency Council of Mental Retardation & Developmental Disabilities, Inc., 110 A.D.3d 1049, 1049 (2d Dep't 2013).

30 Heartland Brewery, Inc. v. Nova Cas. Co., 149 A.D.3d 522, 522–23 (1st Dep't 2017).

31 Sarinsky's Garage Inc. v. Erie Ins. Co., 691 F. Supp. 2d 483, 486 (S.D.N.Y. 2010).

32 See, e.g., Grewal v. Cuneo Gilbert & Laduca LLP, No. 13-CV-6836, 2018 WL 4682013, at *6 (S.D.N.Y. Sept. 28, 2018) ('A party's uncommunicated subjective intent [cannot] supply the ultimate meaning of an ambiguous contract.'); Axiom Inv. Advisors, LLC v. Duetsche Bank AG, No. 15 CIV. 9945 (LGS), 2018 WL 4253152, at *6 (S.D.N.Y. Sept. 6, 2018) ('Extrinsic evidence may also include industry custom and practice if certain requirements are met.').

33 Ashwood Capital, Inc. v. OTG Mgmt., Inc.,99 A.D.3d 1,7 (1st Dep't 2012).

34 Eitan Ventures, LLC v. Peeled, Inc., 94 A.D.3d 614, 616 (1st Dep't 2012).

35 T.M. Real Estate Holding, LLC v. Stop & Shop Supermarket Co. LLC, No. 12 CIV. 1808 CM, 2013 WL 603325, at *6–*7 (S.D.N.Y. Feb. 14, 2013), aff'd sub nom., 543 F. App'x 41 (2d Cir. 2013).

36 T.M. Real Estate Holding, LLC v. Stop & Shop Supermarket Co. LLC, No. 12 CIV. 1808 Id., 2013 WL 603325, at *7 (S.D.N.Y. Feb. 14, 2013), aff'd sub nom., 543 F. App'x 41 (2d Cir. 2013).

37 This section discusses neither the sale of goods nor other similar commercial transactions governed by the Uniform Commercial Code, nor does it discuss employment law. This section solely addresses common law contract provisions, and the reader is advised to consult additional sources for information on those topics.

38 Karimian v. Time Equities, Inc., 164 A.D.3d 486, 489 (2d Dep't 2018).

39 VFS Financing, Inc. v. Falcon Fifty LLC, 17 F.Supp.3d 372, 379 (S.D.N.Y. 2014).

40 Doner-Hedrick v. N.Y. Inst. of Tech., 874 F. Supp. 2d 227, 242 (S.D.N.Y. 2012); see Ma v. Biaggi, 150 A.D.3d 778, 779 (2d Dep't 2017); SBIW, Inc. v. Gen. Elec. Co., No. 10 CIV. 7812, 2013 WL 5338525, at *12 (S.D.N.Y. Sept. 24, 2013); Willoughby Rehab. & Health Care Ctr., LLC v. Webster, 134 A.D.3d 811, 814 (2d Dep't 2015).

41 Hadden v. Consol. Edison Co. of N.Y., Inc., 34 N.Y.2d 88, 96 (N.Y. 1974).

42 Id.

43 Lola Roberts Beauty Salon, Inc. v. Leading Ins. Grp. Ins. Co., 160 A.D.3d 824, 825 (2d Dep't 2018).

44 Concesionaria DHM, S.A. v. Int'l Fin. Corp., 307 F.Supp.2d 553, 565 (S.D.N.Y. 2004); see also Town Sports Intern., LLC v. Ajilon Sol., 976 N.Y.S.2d 53, 55 (1st Dep't 2013) (dismissing the implied covenant of good faith and fair dealing claim because it was 'duplicative of the breach of contract claim').

45 See Transit Funding Assocs., LLC v. Capital One Equip. Fin. Corp., 149 A.D.3d 23, 29 (1st Dep't 2017) ('The covenant of good faith and fair dealing cannot negate express provisions of the agreement, nor is it violated where the contract terms unambiguously afford Capital One the right to exercise its absolute discretion to withhold the necessary approval.').

46 Ahmed Elkoulily, M.D. v. New York State Catholic Healthplan, Inc., 153 A.D.3d 768, 770 (2d Dep't 2017).

47 Kaplan v. Madison Park Grp. Owners, L.L.C., 94 A.D.3d 616, 618 (1st Dep't 2012).

48 Princes Point LLC v. Muss Dev. L.L.C., 30 N.Y.3d 127, 133 (2017).

49 Id.

50 DiFolco v. MSNBC Cable L.L.C., 831 F. Supp. 2d 634, 641 (S.D.N.Y. 2011).

51 See, e.g., 159 MP Corp. v. Redbridge Bedford, L.L.C., 160 A.D.3d 176, 190 (2d Dep't 2018).

52 Id.

53 See, e.g., London Paint & Wallpaper Co. v. Kesselman, 158 A.D.3d 423, 424 (1st Dep't 2018); Total Telecom Grp. Corp. v. Kendal on Hudson, 157 A.D.3d 746, 747 (2d Dep't 2018).

54 See Moshan v. PMB, LLC, 141 A.D.3d 496, 496 (1st Dep't 2016).

55 See Main St. Baseball, LLC v. Binghamton Mets Baseball Club, Inc., 103 F. Supp. 3d 244, 254–55 (N.D.N.Y. 2015) (finding that an exclusive negotiation period in a preliminary agreement was enforceable); Learning Annex Holdings, LLC v. Whitney Educ. Grp., Inc., 765 F. Supp. 2d 403, 413–414 (S.D.N.Y. 2011); McLeod v. Post Graduate Ctr. for Mental Health, No. 14 CIV 10041 ALCF, 2016 WL 6126014, at *2 (S.D.N.Y. Sept. 30, 2016) (holding that an MOU completed by parties at a mediation was enforceable where parties agreed on material components and the MOU contained a strict confidentiality clause).

56 N.Y. C.P.L.R. § 213.

57 See Ely-Cruikshank Co. v. Bank of Montreal, 81 N.Y.2d 399, 402 (1993).

58 See Rudin v. Disanza, 202 A.D.2d 202, 203 (1st Dep't 1994).

59 See D&S Restoration, Inc. v. Wenger Constr. Co., Inc., 160 A.D.3d 924, 925–26 (2d Dep't 2018).

60 See Batales v. Friedman, 144 A.D.3d 849, 850-51 (2d Dep't 2016).

61 See Reddy v. Mihos, 160 A.D.3d 510, 514 (1st Dep't 2018).

62 Moezinia v. Ashkenazi, 136 A.D.3d 988, 989 (2d Dep't 2016).

63 See Transparent Value, L.L.C. v. Johnson, 93 A.D.3d 599, 600 (1st Dep't 2012).

64 See Lubov v. Horing & Welikson, P.C., 72 A.D.3d 752, 753 (2d Dep't 2010).

65 See Youshah v. Staudinger, 604 N.Y.S.2d 479, 480 (Sup. Ct. 1993).

66 See Brown & Brown, Inc. v. Johnson, 25 N.Y.3d 364, 368 (2015) (quoting Cooney v. Osgood Mach., Inc., 81 N.Y.2d 66, 79 (1993)).

67 See Lanza v. Carbone, 130 A.D.3d 689, 691 (2d Dep't 2015).

68 See 159 MP Corp. v. Redbridge Bedford, LLC, 160 A.D.3d 176, 186–87 (2d Dep't 2018).

69 See, e.g., DRMAK Realty LLC v. Progressive Credit Union, 133 A.D.3d 401, 404 (1st Dep't 2015).

70 See VKK Corp. v. Nat'l Football League, 244 F.3d 114, 122 (2d Cir. 2001) (quoting Sci. Holding Co. v. Plessey Inc., 510 F.2d 15, 22 (2d Cir.1974)).

71 See DRMAK Realty LLC v. Progressive Credit Union, 133 A.D.3d 401, 403 (1st Dep't 2015).

72 The Restatement of Contracts uses the term impracticability to define what courts would have described as impossibility. See Lowenschuss v. Kane, 520 F.2d 255, 265 (2d Cir. 1975) (citing Restatement (First of Contracts § 454 (1932)). Therefore, the two terms are used interchangeably here.

73 See Kolodin v. Valenti, 115 A.D.3d 197, 200 (1st Dep't 2014) (quoting Kel Kim Corp. v. Cent. Markets, Inc., 70 N.Y.2d 900, 902 (1987)).

74 See 407 E. 61st Garage, Inc. v. Savoy Fifth Ave. Corp., 23 N.Y.2d 275, 281 (1968).

75 MG Ref. & Mktg., Inc. v. Knight Enterprises, Inc., 25 F. Supp. 2d 175, 188 (S.D.N.Y. 1998).

76 See Nomura Home Equity Loan, Inc. v. Nomura Credit & Capital, Inc., 133 A.D.3d 96, 106-07 (1st Dep't 2015).

77 See, e.g., Valenti v. Going Grain, Inc., 159 A.D.3d 645, 645 (1st Dep't 2018).

78 See Structure Tone, Inc. v. Universal Servs. Grp., Ltd., 87 A.D.3d 909, 912 (1st Dep't 2011).

79 Jack Kelly Partners LLC v. Zegelstein, 140 A.D.3d 79, 85 (1st Dep't 2016); see also A + E Television Networks, LLC v. Wish Factory Inc., No. 15-CV-1189 (DAB), 2016 WL 8136110, at *12–13 (S.D.N.Y. Mar. 11, 2016) (frustration of purpose defence failed despite allegation that party's comments deprived defendant of business because financial hardship is not a defence to contract enforcement under New York law); Tycoons Worldwide Grp. (Thailand) Pub. Co. v. JBL Supply Inc., 721 F. Supp. 2d 194, 203 (S.D.N.Y. 2010) (possibility of delays was foreseeable to both parties, and therefore did not constitute the type of event that would excuse performance under the contract).

80 A+E Television Networks, LLC v. Wish Factory Inc., No. ۱۵-CV-۱۱۸۹ (DAB), ۲۰۱۶ WL ۸۱۳۶۱۱۰ at *۱۳ (S.D.N.Y. Mar. ۱۱, ۲۰۱۶).

81 See Gen. Elec. Co. v. Metals Res. Grp. Ltd., 293 A.D.2d 417, 419 (1st Dep't 2002).

82 Basis PAC-Rim Opportunity Fund (Master) v. TCW Asset Mgmt. Co., 149 A.D.3d 146, 149 (1st Dep't 2017).

83 TufAmerica, Inc. v. Codigo Music LLC, 162 F. Supp. 3d 295, 326 (S.D.N.Y. 2016).

84 Id.; Stortini v. Pollis, 138 A.D.3d 977, 978 (2d Dep't 2016).

85 Int'l Exterior Fabricators, LLC v. Decoplast, Inc., 128 A.D.3d 1016, 1018 (2d Dep't 2015).

86 Lankau v. Luxoft Holding, Inc., 266 F. Supp. 3d 666, 675 (S.D.N.Y. 2017).

87 See, Merrill Lynch & Co. Inc. v. Allegheny Energy, Inc., 500 F.3d 171, 181 (2d Cir. 2007).

88 See, e.g., Allenby, LLC v. Credit Suisse, AG, 134 A.D. 3d 577, 580 (1st Dep't 2015); Basis Yield Alpha Fund Master v. Stanley, 136 A.D.3d 136, 141–43 (1st Dep't 2015).

89 See Danann Realty Corp. v. Harris, 5 N.Y.2d 317, 320–21 (1959); JM Vidal, Inc. v. Texdis USA, Inc., 764 F. Supp. 2d 423–24, 599, 624 (S.D.N.Y. 2011); JMC Ne. Corp. v. Porcelli, 100 A.D.3d 552, 552–53 (1st Dep't 2012).

90 Danann Realty, 5 N.Y. 2d at 320–21; St. Paul Mercury Ins. Co. v. M & T Bank Corp., No. 12 CIV. 6322 JFK, 2014 WL 641438, at *5 (S.D.N.Y. Feb. 19, 2014).

91 N. Grp. Inc. v. Merrill Lynch, Pierce, Fenner & Smith, 135 A.D.3d 414, 414 (1st Dep't 2016).

92 Orient Overseas Assocs. v. XL Ins. Am., Inc., 132 A.D.3d 574, 577 (1st Dep't 2015).

93 Spinelli v. Nat'l Football League, 903 F.3D 185, 209–11 (2d Cir. 2018).

94 Signature Fin. LLC v. Neighbors Glob. Holdings, LLC, 281 F. Supp. 3d 438, 446 (S.D.N.Y. 2017) (quoting Matter of Smith Barney v. Luckie, 85 N.Y.2d 193, 201 (1995)).

95 KTV Media Int'l, Inc. v. Galaxy Grp., LA LLC, 812 F. Supp. 2d 377, 387 (S.D.N.Y. 2011).

96 Universal Investment Advisory SA v. Bakrie Telecom PTE, Ltd., 154 A.D.3d 171, 179 (1st Dep't 2017).

97 Moose Toys Pty, Ltd. v. Creative Kids Far E. Inc., 195 F. Supp. 3d 599, 402–03 (S.D.N.Y. 2016).

98 N.Y. Gen Oblig. Law § 5-1401.

99 Id. § 5-1402.

100 IRB-Brasil Resseguros, S.A. v. Inepar Investments, S.A., 20 N.Y.3d 310, 314–15 (2012).

101 Honeywell Int'l Inc. v. ARC Energy Servs., Inc., 152 A.D.3d 444, 444 (1st Dep't 2017).

102 N.Y. Comp. Codes R. & Regs. tit. 22, § 202.70(a).

103 Id. § 202.70(b).

104 Id. § 202.70(g) Rule 9. Court proceedings generally commence in New York courts when a request for judicial information is filed by one of the parties.

105 N.Y. C.P.L.R. § 7501.

106 N.Y. C.P.L.R. § 7503(a); Piller v. Tribeca Dev. Grp. LLC, 156 A.D.3d 1257, 1260 (3d Dep't 2017).

107 Burke v. Gray, 146 A.D.3d 452 (1st Dep't 2017) (quoting Gerling Glob. Reinsurance Corp. v. Home Ins. Co., 302 A.D.2d 118, 126 (1st Dep't 2002)).

108 Ferrarella v. Godt, 131 A.D.3d 563, 566 (2nd Dep't 2015).

109 N.Y. C.P.L.R. § 7502.

110 See Patterson v. Raymours Furniture Co., 96 F. Supp. 3d 71, 76 (S.D.N.Y. 2015), aff'd, 459 F. App'x 40 (2d Cir. 2016); Schiffer v. Slomin's, Inc., 11 N.Y.S. 3d 799, 801–02 (N.Y. App. Term 2015).

111 Harris v. Seward Park Hous. Corp., 79 A.D.3d 425, 426 (1st Dep't 2010).

112 Post-judgment interest is awarded in breach of contract actions, at a rate of 9 per cent. C.P.L.R. § 5001–5004.

113 E.J. Brooks Co. v. Cambridge Sec. Seals, 31 N.Y.3d 441, 448 (2018).

114 Id.

115 Uncas Int'l LLC v. Crimzon Rose, Inc., No. 16 CIV. 9610 (JSR), 2017 WL 2839668, at *6 (S.D.N.Y. June 26, 2017).

116 See Carco Group, Inc. v. Maconachy, 718 F.3d 72, 82 (2d Cir. 2013).

117 Uncas Int'l LLC v. Crimzon Rose, Inc., No. 16 CIV. 9610 (JSR), 2017 WL 2839668, at *6 (S.D.N.Y. June 26, 2017).

118 Biotronik A.G. v. Conor Medsystems Ireland, Ltd., 22 N.Y.3d 799, 806 (2014).

119 World of Boxing, LLC v. King, 634 F. App'x 1, 3 (2d Cir. 2015).

120 Id. at 4.

121 172 Van Duzer Realty Corp. v. Globe Alumni Student Assistance Ass'n, Inc., 24 N.Y.3d 528, 536 (2014).

122 555 W. John St., LLC v. Westbury Jeep Chrysler Dodge, Inc., 149 A.D.3d 796, 797 (2d Dep't 2017).

123 172 Van Duzer Realty Corp. v. Globe Alumni Student Assistance Ass'n, Inc., 24 N.Y.3d 528, 536 (2014).

124 Pinnacle Info. Sys. v. W. Clearing Corp., No. 11 CV 5092 NRB, 2011 WL 3586433, at *1 (S.D.N.Y. Aug. 4, 2011).

125 JPMorgan Chase Bank v. Corrado, 162 A.D.3d 994, 996 (2d Dep't 2018).

126 2470 Cadillac Res., Inc. v. DHL Exp. (USA), Inc., 84 A.D.3d 697, 699 (1st Dep't 2011).

127 Help Me See, Inc. v. Wonderwork, Inc. for Poor, Inc., 157 A.D.3d 455, 455 (1st Dep't 2018).

128 Gotham Partners, L.P. v. High River Ltd. P'ship, 76 A.D.3d 203, 204 (1st Dep't 2010).

129 In re MF Glob. Holdings Ltd., No. 12 CIV. 4139 AJN, 2013 WL 139594, at *5 (S.D.N.Y. Jan. 11, 2013), aff'd sub nom. In re MF Glob. Holdings Ltd., 531 F. App'x 179 (2d Cir. 2013) (citing American Tissue, Inc. v. Donaldson, Lufkin & Jenrette Secs. Corp., 351 F.Supp.2d 79, 99 (S.D.N.Y.2004)).

130 Amguard Ins. Co. v. Getty Realty Corp., 147 F. Supp. 3d 212, 220 (S.D.N.Y. 2015).

131 Id.

132 Chester Green Estates, LLC v. Arlington Chester, LLC, 161 A.D.3d 1036, 1038 (2d Dep't 2018).

133 Id.

134 DAG Jewish Directories, Inc. v. Y & R Media, LLC, No. 09CIV.7802RJH, 2010 WL 46016, at *1 (S.D.N.Y. Jan. 7, 2010).

135 Bisnews AFE (Thailand) Ltd. v. Aspen Research Grp. Ltd., 437 F. App'x 57 (2d Cir. 2011).

136 Singas Famous Pizza Brands Corp. v. New York Advert. LLC, No. 10 CIV. 8976 RJH, 2011 WL 497978, at *6 (S.D.N.Y. Feb. 10, 2011), aff'd, 468 F. App'x 43 (2d Cir. 2012).

137 Int'l Exterior Fabricators, LLC v. Decoplast, Inc., 128 A.D.3d 1016, 1018 (2d Dep't 2015).

138 Id.

139 Jack Kelly Partners LLC v. Zegelstein, 140 A.D.3d 79, 80 (1st Dep't 2016).

140 US Bank Nat. Ass'n v. Lieberman, 98 A.D.3d 422, 423–24 (1st Dep't 2012).

141 Gaylords Nat. Corp. v. Arlen Realty & Dev. Corp., 112 A.D.2d 93, 96 (1st Dep't 1985).

142 Id.

143 Electron Trading, LLC v. Morgan Stanley & Co. LLC, 157 A.D.3d 579, 580 (1st Dep't 2018).

144 id; see also Nomura Home Equity Loan, Inc., Series 2006-FM2, by HSBC Bank USA, Nat'l Ass'n v. Nomura Credit & Capital, Inc., 30 N.Y.3d 572, 581 (2017).

145 See DynCorp v. GTE Corp., 215 F. Supp. 2d 308, 318 (S.D.N.Y. 2002).

146 Electron Trading, 157 A.D.3d at 580.

147 Id. at 580–81.

148 Id. at 581.