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Current Developments in the Commercial Divisions of the
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Posted: September 20, 2017

Alleged Breach by Plaintiff Insufficient to Prevent Judgment on Contract Claim

On September 11, 2017, Justice Masley of the New York County Commercial Division issued a decision in New York University v. International Brain Research Foundation, Inc., 2017 NY Slip Op 31934(U), granting a plaintiff summary judgment on its breach of contract claim despite the presence of evidence that the plaintiff failed fully to comply with the contract, explaining:

Defendant next disputes plaintiffs’ performance under the Grant Agreement. . . . [D]efendant attempts to raise a factual issue by claiming that plaintiffs failed to comply with the Grant Agreement’s provision requiring them to submit quarterly progress reports. Plaintiffs insist that regular progress reports were sent to IBRF. Indeed, in an email to NYU dated June 6, 2013, Dr. Hilz confirmed that he sent regular quarterly reports to IBRF. In his February 2017 affidavit, Dr. DeFina admits to receiving some progress reports.

There is nothing in the record showing that defendant raised this issue with plaintiffs during the course of the three-year term of the Grant Agreement. In fact; in paragraph 20 of his affidavit in opposition, Dr. DeFina merely provides the vague assertion that, at best, only a few reports were received. Moreover, defendant asserted a breach of contract counterclaim in its Second Amended Counterclaims, but that counterclaim was dismissed by the court in its 2016 Decision because IBRF failed to allege sufficient facts to support its claim that NYU SOM breached either the Grant Agreement or the Draft Policy. The Second Amended Counterclaims do not refer to any specific provisions of either document, and merely plead conclusory allegations in support of IBRF’s claim of breach. At no time did defendant claim that any alleged failure by plaintiffs to provide quarterly reports was the basis for its decision to withhold the Grant Agreement payments at issue in this litigation. More importantly, at this juncture; any claim that defendant may have had pertaining to plaintiffs’ alleged failure to provide quarterly reports has been waived.

Contractual rights may be waived if they are knowingly, voluntarily and intentionally abandoned, and such abandonment can be established by affirmative conduct or by failure to act so as to evince an intent not to claim a purported advantage. Waiver should not be lightly presumed and must be based on a clear manifestation of intent to relinquish a contractual protection. Here, by waiting to raise this issue until it opposed plaintiffs’ motion for summary judgment, defendant clearly manifested its intent to relinquish its contractual right to quarterly reports from plaintiffs.

(Internal quotations and citations omitted).

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