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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: April 16, 2020

Breach of Contract Claim Dismissed for Failure to Identify Contract Terms that Were Breached

On April 2, 2020, Justice Ostrager of the New York County Commercial Division issued a decision in Icon DE Holdings, LLC v. Mondani Handbags & Accessories, Inc., 2020 NY Slip Op. 30904(U), dismissing a breach of contract claim for failure to identify the specific terms of the contract that were breached, explaining:

Plaintiff argues that defendant’s counterclaim should be dismissed because it fails to identify specific provisions of the Agreement which plaintiff allegedly breached; that the counterclaim is barred by the statute of limitations; and that the counterclaim is barred by substantive terms of the Agreement, particularly the merger clause which prohibits oral modifications.

The Court finds that the Counterclaim must be dismissed as it is currently stated because it lacks specificity. The Counterclaim does not indicate which specific provisions of the Agreement and/or Amendments plaintiff purportedly violated, nor does it provide dates of the alleged conduct.

While all parties and the Court agree that the six-year statute of limitations for breach of contract bars any claims before October 28, 2013, the Court presently has no way of knowing whether the alleged conduct occurred in whole or part on or after October 28, 2013 because the counterclaim does not have dates.

Also, while the law does permit defendant to supplement its pleadings with an affidavit based on personal knowledge, which defendant has attempted to do, the Court finds that for clarity the better practice is for defendant to replead it counterclaim, identifying specific provisions of the Agreement and/or Amendments plaintiff allegedly breached with dates and details such that the Court can make a determination on the merits. The amended pleadings should make clear that none of the alleged breaches occurred outside the statute of limitations period, and that none are barred by the merger clause or any of the other terms of the Agreement and its Amendments.

(Internal quotations and citations omitted).

Part of the reason parties to commercial contracts choose to have those contracts governed by New York law is that New York courts typically enforce contracts as written. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding the interpretation of a contract under New York law.

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Posted in Commercial, Contracts
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