Court Denies Leave To Add Impossibility And Mutual Mistake Defenses Where Contract Addressed The Contingency

Posted: June 1, 2026 / Written by: Channing J. Turner, Thomas A. Kissane, Samuel L. Butt, Ian Weiss / Categories Motion to Amend, Corporate Transactions, Contract Interpretation

Court Denies Leave To Add Impossibility And Mutual Mistake Defenses Where Contract Addressed The Contingency

On April 14, 2026, Justice Melissa A. Crane of the New York County Commercial Division denied defendant’s motion to amend its answer to assert new defenses. The case is Jefferies LLC v. Rubicon Technologies, Inc., Index No. 654165/2024.

Defendant Rubicon was successor to an Amended Underwriting Agreement that called for payment to plaintiff Jefferies upon the closing of a certain transaction. The Amended Underwriting Agreement gave Rubicon the option of paying in stock of the public company that emerged from the closing. Rubicon did not dispute that the triggering transaction had closed but, because the Securities Exchange Commission refused to permit registration of the company stock or the warrants to Jefferies, sought to amend its answer to assert defenses of impossibility of performance and mutual mistake.

Justice Crane held that amendment to allege an impossibility defense would be futile because the Amended Underwriting Agreement provided that any amount due to Jefferies that was not paid in stock remained due in cash. Slip op., p. 3, quoting Amended Underwriting Agreement (“For the avoidance of doubt, any portion of the Post Closing Deferred Cash Obligation that is not satisfied with Post-Closing Deferred Stock Payment Shares shall remain due and payable in cash in accordance with this section.”)

That same language rendered amendment to allege a defense of mutual mistake futile, because that defense “is not available when the contract at issue is based on uncertain events, like regulatory approval.” Id., p. 4 (collecting cases.)

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning motions to amend or interpretation of corporate contracts.