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Current Developments in the Commercial Divisions of the
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Posted: June 9, 2015

Contract Unenforceable for Lack of Definiteness

On June 3, 2015, the Second Department issued a decision in UETA Latinamerica, Inc. v. Zafir, 2015 NY Slip Op. 04633, dismissing a breach of contract claim for lack of definiteness.

In UETA Latinamerica, the trial court dismissed the plaintiffs’ claims for breach of contract and unjust enrichment. The Second Department affirmed as to breach of contract but reversed the dismissal of the related unjust enrichment claim, explaining:

The terms of the alleged agreement set forth in [the document upon which the plaintiffs base their claim] are too indefinite and uncertain to be enforceable. The doctrine of definiteness, well established in contract law, means that a court cannot enforce a contract unless it is able to determine what in fact the parties have agreed to. . . . .

The Supreme Court erred, however, in directing the dismissal of the cause of action alleging unjust enrichment insofar as asserted by the plaintiff UETA Latinamerica, Inc. (hereinafter UETA), against [the defendant]. To recover for unjust enrichment, a plaintiff must show that (1) the defendant was enriched, (2) at the plaintiff’s expense, and (3) that it is against equity and good conscience to permit the defendant to retain what is sought to be recovered. Such quasi contract only applies in the absence of an express agreement, and is not really a contract at all, but rather an equitable obligation imposed in order to prevent a party’s unjust enrichment. Here, the complaint alleges that [the defendant] received a benefit when he received luxury watches worth millions of dollars from UETA’s predecessor in interest, with the understanding and reasonable expectation that [he] would pay for those goods, and that [he] was personally enriched by taking the millions of dollars worth of luxury watches, while failing and refusing to pay for said merchandise. Such allegations are sufficient to state a cause of action alleging unjust enrichment . . .

(Internal quotations and citations omitted) (emphasis added).

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