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Current Developments in the Commercial Divisions of the
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Posted: April 12, 2018

“Notwithstanding” Clause Trumps Potentially Contradictory Contract Provision

On April 5, 2018, the First Department issued a decision in Veneto Hotel & Casino, S.A. v. German American Capital Corp., 2018 NY Slip Op. 02414, holding that a “notwithstanding” clause trumps a potentially conflicting contract provision, explaining:

[E]ven if section 3.1.7(v) could be interpreted to be inconsistent with section 3.1.11(a), section 3.1.11(a) would still prevail in light of the trumping language found within it, which provides that it would apply “notwithstanding anything to the contrary” in the Loan Agreement. Defendant acted within the authority and discretion provided to it under section 3.1.11(a).

(Internal citations omitted).

This decision illustrates one the many rules for interpreting contracts. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding a dispute over the interpretation of a contract.

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