In the case of Truist Equipment Finance Corp. v. Tebele, 2025 NY Slip Op 35031(U), the New York court held that a forbearance agreement, entered into between a lender and a borrower regarding the borrower's pre-existing loan, did not transform the Guaranty (personal guarantee) into an instrument outside the scope of...
Category: Breach of Contract
CPA firms’ engagement letters . . . consider including the right to resign “at any time” . . . and consider also including . . .
In Hyros, Inc. v. Marcum, LLP, Index No. 653718/2023 the court upheld Marcum LLP's right to terminate its contractual relationship with its client pursuant to either of the two clauses in Marcum LLP's engagement letter: (i) "the right to terminate [the] services at any time" and (ii) [Marcum] "may resign from the...
CPA firms’ non-compete clauses . . . less is more . . . time to re-examine their scope
On May 13, 2025, a New York court (Prager Metis CPAs LLC v. Koenig, Index No. 652000/2023) held that the non-compete/client non-solicitation clauses (often referred to as 'restrictive covenants') in a CPA firm's employment contract with its CPA employee were too broad (thus, unreasonable) and, therefore, granted summary judgment (without trial)...
Partnership Agreement formalities . . . technical compliance may outweigh practical compliance
If a contract (particularly a Partnership Agreement or other similar contract, such as an Operating Agreement or a Shareholders Agreement) requires that a particular notice be delivered "by" or "from" the Partnership (or by LLC or the corporation, as the case may be), that notice must clearly identify that it is ...
M&A intermediaries . . . beware of time bombs hiding in confidentiality clauses in Seller/Target company contracts
In AriZona Beverages USA, LLC v. Evercore, Inc., (Sup. Ct., Nassau Cnty,. Aug. 27, 2024) (Index #608480/2024), the Court held that a merger and acquisitions intermediary (which was acting as a broker between a prospective seller and prospective buyers) breached a confidentiality clause that was in a contract between the seller...
Promissory Notes and Personal Guaranties – “magic words” satisfy expedited collection under CPLR 3213
One of the benefits of being owed money under a promissory note (and, when applicable, a personal guaranty(ee)), in contrast to being owed money under an ordinary contract, is that the lender can qualify for an expedited procedure for collecting the debt under CPLR 3213. To qualify for CPLR 3213, the instrument...
Contract is enforceable even if the price/fee to be paid is not specific . . . “sufficiently definite” satisfies the required legal standard
In Daiwa Corporate Advisory LLC v. Katapult Group, Inc. (NY County Supreme Court, Index No. 652164/2021), the trial court held that a contract is enforceable where the fees payable were to be “mutually-agreed” based on “customary and . . . similar transactions and practices in the investment banking industry.”
“Willful misconduct”– a commonly used term in contracts does not mean what you think it means
In Manhattan Chrystie St. Dev. Fund LLC v. Witkoff Group LLC (2023 NY Slip Op 50622(U), 2023 N.Y. Misc. LEXIS 3056), a New York trial court analyzed the meaning of the term "willful misconduct" in a commercial contract (specifically, a guaranty) governed by Delaware law.
The trial court generally...
Blog Series: An Ounce of Precision in Contracts – Dispute Resolution
***This blog posting is one in a series that we anticipate posting specifically regarding the importance of spending additional time to carefully review and to write--with precision--the various clauses in business documents in general, and specifically in contracts.***
In FFS Data Corp. v. The OLB...
A Forum Selection Clause in Entity Resolutions? Not Necessary! Think again . . . A NY Court disagrees.
In Meltzer v. Kentucky Hi Tech Greenhouses LLC, 2023 N.Y. Misc. LEXIS 160, the Manager of a Kentucky LLC filed a lawsuit in New York against the LLC to recover unpaid wages purportedly owed to the Manager by the Kentucky LLC. The LLC moved to dismiss the lawsuit...