Breach of Contract in New York

What Is a Breach of Contract?

Background

The following elements must be established on a breach of contract claim: (1) a valid and enforceable contract; (2) the plaintiff's performance of the contract; (3) breach by the defendant; and (4) damages. (See Noise in Attic Prods., Inc. v London Records, 10 AD3d 303, 307 (1st Dep't 2004); Furia v Furia, 116 AD2d 694, 695 (2d Dep't 1986)).

A contract is binding if there is an offer, acceptance, consideration, mutual assent, an intent to be bound, and both sides agree on all of the essential terms. (See Kowalchuk v. Stroup, 61 A.D.3d 118, 121 (First Dept. 2009)). Parties can enter into a binding contract even without committing their agreement to a fully executed written document. (See Bear Stearns Inv. Products, Inc. v. Hitachi Auto. Products (USA), Inc., 401 B.R. 598, 617 (S.D.N.Y. 2009)).

In New York, some contracts must be in writing to be enforceable. Under N.Y. Gen. Oblig. Law § 5-701(a), 5-701(a)(1), a contract must be in writing if:

By its terms is not to be performed within one year from the making thereof or the performance of which is not to be completed before the end of a lifetime;
Is a special promise to answer for the debt, default or miscarriage of another person;
Is made in consideration of marriage, except mutual promises to marry;
Is a subsequent or new promise to pay a debt discharged in bankruptcy;
Notwithstanding section 2-201 of the uniform commercial code, if the goods be sold at public auction, and the auctioneer at the time of the sale, enters in a sale book, a memorandum specifying the nature and price of the property sold, the terms of the sale, the name of the purchaser, and the name of the person on whose account the sale was made, such memorandum is equivalent in effect to a note of the contract or sale, subscribed by the party to be charged therewith;
Is a contract to assign or an assignment, with or without consideration to the promisor, of a life or health or accident insurance policy, or a promise, with or without consideration to the promisor, to name a beneficiary of any such policy. This provision shall not apply to a policy of industrial life or health or accident insurance.
Is a contract to pay compensation for services rendered in negotiating a loan, or in negotiating the purchase, sale, exchange, renting, or leasing of any real estate or interest therein, or of a business opportunity, business, its goodwill, inventory, fixtures or an interest therein, including a majority of the voting stock interest in a corporation and including the creating of a partnership interest.

A contract may be implied from the circumstances and the intention of the parties, revealed through their conduct.

(See Yankee Lake Pres. Ass’n, Inc. v. Stein, 68 A.D.3d 1603, 1604-05 (3rd Dept. 2009).)

Timeline

In accordance with Section 213 of the New York Consolidated Laws, Civil Practice Law & Rules, the default statute of limitations for both oral and written contracts is six years after the date of breach, though the contract may include provisions requiring a shorter period of time by which the action must be brought.

Monetary Awards

The plaintiff in a breach of contract case must make a reasonable effort to mitigate its damages, even if their efforts are unsuccessful. (M. Golodetz Exp. Corp. v. S/S Lake Anja, 751 F.2d 1103, 1112 (2d Cir. 1985)).

A breach of contract plaintiff may recover reliance damages when the benefit of the bargain damages cannot be calculated with reasonable certainty. These damages may include the amounts the plaintiff spent preparing for defendant’s performance and may also include debt obligations. (See In re Apollo Air Passenger Computer Reservation Sys. (CRS), 720 F. Supp. 1068, 1076 (S.D.N.Y. 1989); In re: Residential Capital, LLC, 533 B.R. 379, 407 (Bankr. S.D.N.Y. 2015); Nature’s Plus Nordic A/S v. Nat. Organics, Inc., 98 F. Supp. 3d 600, 606 (E.D.N.Y. 2015)).

Lost profits and market value recovery depends on the case. It may be simpler to calculate the fair market value with reasonable certainty than to calculate lost profits. The fair market value of a contract is “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.” (Emposimato v. CIFC Acquisition Corp., 2011 N.Y. Slip Op. 50343(U), 2011 WL 833801 (Sup. Ct. N.Y. Cnty. 2011)). Lost profits “must be capable of measurement based upon known reliable factors without undue speculation.” (Id. at 172).

New York courts generally enforce liquidated damages clause if the liquidated damages amount does not constitute a penalty. (MD Holding Corp. v. Cong. Fin. Corp., 4 N.Y.3d 373, 381 (2005)).

Documents for Breach of Contract – General in New York

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Itria Ventures Llc v. Mari'S Kitchen Rosticceria Inc, Luigi Pellecchia, Giancarlo Pellecchia Rojas document preview

SUMMONS + COMPLAINT

4 pages

FILED: KINGS COUNTY CLERK 05/17/2024 02:45 PM INDEX NO. 513890/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 05/17/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS ITRIA VENTURES LLC, Index No. Plain…

Case Name Itria Ventures Llc v. Mari'S Kitchen Rosticceria Inc, Luigi Pellecchia, Gi…