Contracts New York Distinctions

Question 1

New York enforces restrictive covenants on employment, provided they are (4 elements)

Answer 1

reasonable in time and area, necessary to protect the employer’s legitimate interests, not harmful to the general public, and not unreasonably burdensome to the employee. BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999).

Question 2

New York considers any unsolicited and voluntarily sent merchandise an

Answer 2

unconditional gift. A merchant or his agent may not offer for sale any goods if the offer for sale includes the unsolicited sending of such goods. The recipient must have ordered or requested such goods from the merchant or his agent.

Question 3

The recipient of unsolicited goods may

Answer 3

use or dispose of the goods as she sees fit without any obligation to the sender. N.Y. Gen. Oblig. Law § 5-332.

Question 4

If an offer to enter into a contract is made in writing, signed by the offeror or his agent, and the contract specifies that the offer is irrevocable, such offer

Answer 4

may not be revoked during the stated time period (or for a reasonable time if no period of time is stated).

Consideration is not needed to support the offer. This provision does not apply to an offer by a merchant to buy or sell goods.

Merchants remain subject to the “firm offer” rules set forth under the UCC. N.Y. Gen. Oblig. Law § 5-1109.

Question 5

An offeror can revoke an offer to a unilateral contract….

Answer 5

at any time up until the offeree completes performance. Unlike common law, the beginning of performance by the offeree does not create an option contract or make the offer irrevocable for a reasonable period of time to allow complete performance.

Question 6

A promise to pay a reward for the return of lost or mislaid property is enforceable if

Answer 6

the promise was in writing or the promisor otherwise caused it to be published. N.Y. Gen. Oblig. Law § 5-1113.

Question 7

If a promise or warranty is written into a deed or conveyance of an estate or real property interest and proved in a lawful manner to be recorded, such promise or warranty

Answer 7

will not be denied simply for lack of consideration, if no consideration was intended. N.Y. Gen Oblig. Law § 5-1115.

Question 8

In New York, a written promise, signed by the promisor or his agent, is not deemed invalid solely on the ground that the consideration for the promise is past or executed, so long as the past or executed consideration: (3 elements)

Answer 8

i) Is expressed in the writing;
ii) Is proved to have been given or performed; and
iii) Would be deemed valid consideration at the time it was given or performed.

N.Y. Gen. Oblig. Law § 5-1105.

Question 9

In New York, a written agreement to change or modify any contract or discharge any debt or other obligation is not invalid due to lack of consideration, so long as…

Answer 9

the agreement is expressed in writing and signed by the party against whom it is to be enforced or her agent. N.Y. Gen. Oblig. Law § 5-1103. Note: New York has specifically recognized that a party alleging an oral modification of a contract may be able to assert an estoppel argument. Republic Nat’l Bank v. Sabet, 512 F. Supp. 416 (S.D.N.Y. 1980).

Question 10

In New York, the following contracts may not be disaffirmed by an infant solely on the ground of infancy:

Answer 10

i) All contracts entered into by a person 18 years or older;
ii) Contracts that involve the marital home;
iii) Contracts for artistic or athletic services (subject to judicial approval);
iv) Student loan contracts entered into by a person 16 years or older; and
v) Life insurance contracts by those 14½ years or older.

N.Y. Gen. Oblig. Law § 3-101; N.Y. Arts & Cult. Aff. Law § 35.03; N.Y. Educ. Law § 281.

Remember: MALL

Question 11

New York explicitly makes certain contracts usurious and unenforceable when the interest rate exceeds ___% per annum.

Answer 11

16

Question 12

In New York, the general rule is that exculpatory clauses and limitation of liability clauses are enforceable against negligence claims, but unenforceable against…

Answer 12

willful acts or gross negligence. Kalisch-Jarcho, Inc v. City of New York, 58 N.Y.2d 377 (1983); Melodee Lane Lingerie Co v. American Dist. Tel. Co., 18 N.Y.2d 57 (1966); Ciofalo v. Vic Tanney Gyms, Inc., 10 N.Y.2d 294 (1961).

Question 13

clauses in construction, alteration, repair, or maintenance contracts that exempt the owner, builder, contractor, repairer, or their agents from liability for negligence are against public policy and are…

Answer 13

void and unenforceable.

Question 14

agreements (including language written on admission tickets) exempting facilities such as pools, gyms, and places of public amusement or recreation from liability for negligence are

Answer 14

void and unenforceable as against public policy, as long as the facility owner received a fee or other compensation for use of the facility.

Question 15

For well over a century, parties to construction contracts in New York were permitted by decisional law and by statute to agree to “pay-if-paid” provisions. Agreements of that type create a condition precedent by which subcontractors would not be paid unless the contractor was paid. However,

Answer 15

the Court of Appeals held that such contracts violate New York’s public policy

(because such agreements arguably operated as forbidden waivers of the right to enforce a mechanics’ lien that seeks to protect New York subcontractors from the oppressive use of a contractor’s bargaining power.)

Question 16

An assignment that has the effect of irrevocably transferring an assignor’s rights will not be denied solely for lack of consideration, as long as the assignment is

Answer 16

in writing and signed by the assignor or her agent

Question 17

A signature for Statute of Frauds purposes may be “a name, written or printed, [but] is not to be reckoned as a signature unless

Answer 17

inserted or adopted with an intent, actual or apparent, to authenticate a writing.”

Note that a memorandum sufficient to satisfy the Statute of Frauds does not need to be written at the time a promise is made and can be subsequently reduced to writing. The memorandum also does not have to be addressed to the promisee to be enforceable by the promisee.

Question 18

Most states require that these five categories of contracts be in writing:

Answer 18

Marriage - A contract made upon consideration of marriage;

Suretyship - A contract to answer for the debt or duty of another;

One year - A contract that cannot be performed within one year from its making;

UCC - Under the UCC, a contract for the sale of goods for a price of $500 or more; and

Real property contract - A contract for the sale of an interest in real property.

Question 19

New York also requires the following agreements to be in writing (beyond the standard 5):

Answer 19

i) A subsequent or new promise to pay a debt discharged in bankruptcy;
ii) The assignment of an insurance policy or a promise to name a beneficiary therein;
iii) A contract to pay compensation for services rendered for negotiating real estate transactions or a finder’s fee for introducing a party to a transaction; and (However, contracts with licensed real estate brokers are an express exception to the rule, and remain enforceable even without a writing.)
iv) An agreement to change, modify, or discharge a contract or other obligation involving real or personal property.

NBC-R

Question 20

In New York, an oral contract for the transfer of an interest in real property is enforceable and does not require a writing, as long as two out of the three following subsequent acts take place:

Answer 20

i) Partial or full payment;
ii) Substantial improvements to the property; or
iii) Possession of the property.

Question 21

Contracts that fall within the Statute of Frauds are unenforceable unless they are evidenced by a writing. The writing must:

Answer 21

) Be signed by the party to be charged (i.e., the person against whom enforcement is sought); and

ii) Contain the essential elements of the deal.

The writing need not be formal (i.e., receipts or correspondence can serve as memoranda). The essential elements may be in more than one writing only if one of the writings references the other(s). The writing need not be delivered to the party trying to enforce the contract. Even if it is lost or destroyed, it still operates to satisfy the Statute of Frauds, and its prior existence can be proved by oral evidence.

Question 22

If a party fails to perform by the date given for performance, will there be a breach?

Answer 22

No, unless the contract specifically states that “time is of the essence”

Question 23

When a tenant abandons the premises prior to expiration of the lease, the landlord has three options:

Answer 23

i) Do nothing and collect the full rent due under the lease;
ii) Accept the tenant’s surrender, re-enter the premises, and re-let the premises for its own account, thereby releasing the tenant from further liability for rent; or
iii) Notify the tenant that it is entering and re-letting the premises for the tenant’s benefit; if the landlord re-lets the premises for the benefit of the tenant, the rent collected will be apportioned first to repay the landlord’s expenses in re-entering and re-letting, and then to pay the tenant’s rent obligation.