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Current Developments in the Commercial Divisions of the
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Posted: June 25, 2016

Notice Provision Not Condition Precedent That Results in a Forfeiture

On June 21, 2016, the First Department issued a decision in EidosMedia Inc. v. Citigroup Technology, Inc., 2016 NY Slip Op. 04884, holding that notice provisions did not constitute a condition precedent, explaining:

Defendant argues that plaintiff failed to comply with a notice requirement in the parties’ agreements for the licensing of plaintiff’s software that amounted to a condition precedent to the triggering of defendant’s obligation under the agreements.

We find, contrary to the motion court, that the provisions on which defendant relies do not establish a condition precedent. One provision requires notice, given by plaintiff, upon the completion of installation of the software, but only if it is designated as the “[p]arty responsible for installing the Software.” The other states that defendant can begin testing the software after it has been successfully installed, regardless of who installs it, and makes no reference to any required notice. These provisions, which concern different events, and lack any referential or clear conditional language, cannot be read together to create a condition precedent that results in a forfeiture.

(Citations omitted).

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