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Current Developments in the Commercial Divisions of the
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Posted: October 6, 2015

Court Analyzes Law Regarding Whether a Contract is Ambiguous

On September 14, 2015, Justice Ramos of the New York County Commercial Division issued a decision in Bally Total Fitness of Greater N.Y., Inc. v. Prestige Bay Plaza Dev. Corp., 2015 NY Slip Op. 31805(U), analyzing the law regarding contractual ambiguity.

In Bally Total Fitness of Greater N.Y., the parties dispute arose “out of a disputed term in a lease agreement between the parties.” In deciding the parties’ motions for partial summary judgment, the court reviewed the law relating to contractual ambiguity:

The question of whether a writing is ambiguous is one of law to be resolved by the courts. It is generally accepted that when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms.

Evidence independent of 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. This rule imparts stability to commercial transactions by safeguarding against fraudulent claims, perjury, infirmity of memory and the fear that the jury will improperly evaluate the extrinsic evidence.

(Internal quotations and citations omitted). The court went on to find that the contract was unambiguous and interpreted it as a matter of law.

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