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Current Developments in the Commercial Divisions of the
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Posted: February 10, 2018

Integration Clause Bars Claim for Work Not Covered by Written Agreement

On January 25, 2018, Justice Scarpulla of the New York County Commercial Division issued a decision in Unclaimed Prop. Recovery Serv., Inc. v. Credit Suisse First Boston Corp., 2018 NY Slip Op. 30150(U), holding that a contract’s integration clause barred a claim for payment for work not covered by the contract, explaining:

The unambiguous terms of the 2005 Settlement Agreement limit the parties’ contractual relationship to the items listed on the 2005 Claim Form. Every paragraph describing the benefits to, and the obligations of, the parties under the 2005 Settlement Agreement limits those benefits and obligations to the 2005 Claim Form.

. . .

Plaintiffs also point to the parties’ alleged previous course of conduct, whereby, in December 2007, UPRS recovered cash items that were not listed on the 2005 Claim Form. Plaintiffs argue that this alleged conduct demonstrates that, subsequent to its execution, the parties amended the 2005 Settlement Agreement to allow plaintiffs to pursue all unclaimed funds, without reference to the 2005 Claim Form, and that Credit Suisse consented to execute all documents, without exception.

However, the 2005 Settlement Agreement expressly provides that it “contains the entire agreement among the parties and cannot be modified except by a writing signed by the parties or their attorneys.” Therefore, extrinsic evidence of the parties’ conversations and alleged course of dealings may not be used to vary the terms of the agreement. The remainder of the affirmation is based on Schantz’s personal knowledge as the director of the NYS OUF, and as a recipient of UPRS’s emails to NYS OUF. In addition, because the 2005 Settlement Agreement is unambiguous, there is no need to resort to consideration of the subsequent course of dealings of the parties.

(Internal quotations and citations omitted).

New York contract law–usually straightforward–has traps for the unwary, like the effect of an integration clause, which disclaims prior discussions and agreements and states that the parties’ entire agreement is just the written contract. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client face a situation where you are unsure how to enforce rights you believe you have under a contract.

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