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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: March 21, 2019

Contract Claim Dismissed for Lack of Damages

On February 27, 2019, Justice Sherwood of the New York County Commercial Division issued a decision in Neumann v. Sotheby’s Inc., 2019 NY Slip Op. 30508(U), dismissing a breach of contract claim for lack of damages, explaining:

To sustain a breach of contract cause of action, plaintiff must show: (1) an agreement; (2) plaintiff’s performance; (3) defendant’s breach of that agreement; and (4) damages. . . . Assuming the documentary evidence failed to show the absence of a contract as alleged, the complaint must nonetheless be dismissed for failure to state a cause of action because plaintiff has not alleged any detriment to himself as a result of the breach of contract he alleges. The damages alleged – – lower market prices for Basquiat paintings in the Family Collection and receipt of less money from the Estate – – are entirely speculative and must be rejected. He has no interest in the Basquiat at issue here and he is not bound or restricted from seeking better terms from another auction house for any work in which he has an interest. What plaintiff alleges is merely an offer of favorable terms to be provided if he chooses to do business with Sotheby’s.

(Internal citations omitted).

A key element in commercial litigation is proving damages. As this decision shows, the inability to show damages can be fatal to a claim. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding proving damages.

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Posted in Commercial, Contracts
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