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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: July 4, 2019

Party’s Failure to State its Intent to Perform a Contract can Demonstrate Repudiation

On June 18, 2019, Justice Borrok of the New York County Commercial Division issued a decision in Cooperstein v. Securewatch24 LLC, 2019 NY Slip Op. 31773(U), holding that a party’s refusal to confirm its intent to perform a contract can constitute repudiation of the contract, explaining:

The Defendants argue that the second cause of action for anticipatory repudiation should also be dismissed against Securewatch 24, LLC because the complaint does not allege a definite and final communication of an intention to forgo obligations under the relevant contracts. Mr. Cooperstein argues that its second cause of action remains viable because a party’s failure to state its intent to perform a contract can demonstrate repudiation. Mr. Cooperstein alleges that he e-mailed the Defendants on three occasions regarding payment of his unpaid commissions and each time, the Defendants did not respond. Affording the complaint every favorable inference, the Defendants’ failure to state its intent to perform under the Employment Agreement and Commission Agreement when such agreements required payment by a date certain is sufficient to state a cause of action for anticipatory repudiation. Accordingly, the Defendants’ motion to dismiss the second cause of action against Securewatch 24, LLC is denied.

(Internal citations omitted).

Contract law–usually straightforward–has traps for the unwary, like the rule discussed here that the failure to respond to a request for assurances that you will perform your contractual duties can be taken as a repudiation of the contract. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client face a situation where you are unsure how to enforce rights you believe you have under a contract.

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