Commercial Division Blog
Agreement Contemplating Later Execution of a More-Detailed Agreement Is Still Binding Contract
On July 28, 2016, the First Department issued a decision in Moshan v. PMB, LLC, 2016 NY Slip Op. 05664, holding that a document styled "Letter of Intent" that contemplated a more-detailed final agreement was a binding contract, explaining:
Plaintiff has sufficiently alleged that the commission agreement is a valid and binding contract, and not an unenforceable "agreement to agree". Although the agreement is styled as a "Letter of Intent" and contemplates that a more detailed agreement will be entered into in future, this is not conclusive. Plaintiff has alleged sufficient facts to permit a reasonable inference that the parties manifested an intent to be bound by the commission agreement, including by performing in accordance therewith. The Letter of Intent also sets forth the material terms of the agreement, i.e., the terms of payment of commissions.
(Internal quotations and citations omitted).