2011 Commercial Law Developments

IX. Contracts

A. Formation, Scope, and Meaning of Agreement

  • Jack Henry & Associates, Inc. v. BSC, Inc. , 753 F.Supp.2d 665 (E.D. Ky. 2010) – While it is possible to contract for a higher rate of post-judgment interest than that specified in federal statute, the language of the agreement was not sufficient to do so. A provision that “amounts outstanding after the due date are subject to an interest charge to date of payment at the lesser of 18% per annum or the highest legally allowable rate” was not a clear and unequivocal agreement as to a post-judgment rate of interest higher than the 0.22% then provided for by the applicable federal statute.
  • Teachers Insurance and Annuity Association of America v. CRIIMI MAE Services LP , 681 F.Supp.2d 501 (S.D.N.Y. 2010) – Indenture provided that security holders could not institute any suit, action or proceeding in equity or at law upon or under or with respect to the agreement unless (ii)trustee was given written notice of default, (ii) holders of securities representing at least 25% of each affected class of certificates made request to the trustee to institute such action as trustee and offered indemnification, and (iii) the trustee had not acted within 30 days. The reference to “each affected class” in a securitization (with multiple classes of securities) created uncertainty as to the identity of the security holders required to act and would require factual finding. The court excluded from the required vote classes held by the parent of the servicer whose actions were alleged to be in breach of the indenture. The court also held that the fact that a class that might have been affected (but did not direct the trustee as required by the “no action” provision of the indenture) was repaid in full after the action was brought did not alter the requirement of the indenture that applied at the time the plaintiff class brought its suit against the servicer.
  • Naldi v. Grunberg , 2010 WL 3855189, 2010 N.Y. Slip Op. 07079 (NY App. Div. Oct. 5, 2010) – Email exchange can satisfy the requirements of the statute of frauds and create an enforceable contract (in this case relating to a right of first refusals with respect to real property). Records of electronic communications and electronic signatures satisfied the requirements of the New York statute (NY GOL § 5-703) that there be a writing subscribed by the party to be charged or agent with apparent authority to act. In this case, however, the court found that there was no contract because there was no meeting of the minds between the parties as to the material terms of the transaction – the plaintiff's email acceptance did not comply with the terms of the defendants' email offer. The court did not address whether the defendant's broker had authority to bind the defendant because it had determined no contract was formed.
  • Intertex Trading Corp. v. Ixtaccihuatl S.A. , 754 F.Supp. 2d 610 (S.D.N.Y. 2010) – While commission agreement was not rendered void by the statute of frauds as a contract incapable of performance within one year of formation, it was rendered void by provisions of New York statute of frauds applicable to contracts providing compensation for services rendered in negotiating exchange of business opportunities (NY GOL § 5-701).
  • Arfa v. Zamir , 76 A.D.3d 56, 905 N.Y.S.2d 77 (NY App. Div. 2010) – Plaintiff did not reasonably rely on defendant's representations and warranties and did not make further inquiry or add appropriate language to their agreement for their protection. The agreement had been the result of arms length negotiation between sophisticated parties who were already in an adversarial position. The plaintiff's did not allege that defendant had impeded plaintiff's ability to investigate the accuracy of the relevant representations, plaintiffs did not ask for any documentation, relevant information was a matter of public record and plaintiffs had already received “hints of falsity” that should have placed them on guard.
  • Casano v. New 19 West LLC , 29 Misc.3d 1223, 920 N.Y.S.2d 240, 2010 WL 4630269 (NY Sup. 2010) – Contract contained both an integration clause and a disclaimer of reliance on information other than representations and warranties contained in contract. Party claiming reliance on statements made prior to the contract, which contained disclaimers and were not covered by representations and warranties contained in contract, had no fraud defense to his failure to close the transaction.
  • Torres v. D'Alesso, 2010 N.Y. Slip. Op. 07127, 2010 WL 3909984 (NY App. Div. 2010) – Real estate sales agreement contained an integration clause. Buyer claimed an oral condition precedent to the contract had not been fulfilled and buyer was not bound. Restatement (Second) of Contracts § 217 provides that when parties orally agree that performance of an agreement is subject to the occurrence of an oral condition, the agreement is not integrated with respect to that condition; the integration clause is of no effect unless the contact is in effect, and there is no contract until the condition precedent is satisfied. The court ruled that the alleged unfulfilled oral condition could not be used to avoid the agreement in this case because (i) this was a contract for the sale of real estate (so required to be in writing under the statute of frauds and distinguishable from other New York cases), (ii) the purported oral condition contradicted the merger clause and was of a type that normally would be included in such an agreement, and (iii) since conditions precedent are disfavored, the necessary intent to create the condition was not apparent from the language used by the buyer.
  • 10 Ellicott Square Corp. v. Mountain Valley Indemnity Co ., No. 10-1799, 2010 WL 5295420 (2d. Cir. Dec. 28, 2010) – Condition precedent not fulfilled, therefore no obligation of insurer to provide defense or coverage under a liability policy.
  • Gotham Partners, L.P. v. High River Limited Partnership , 76 A.D.3d 203, 906 N.Y.S.2d 205 (N.Y. App. Div. 2010) – Indemnification language in contract covered only third party claims and not a dispute (or related attorney's fees) between the parties to the contract. Because payment of other party's attorney's fees is not the norm under U.S. law, the provision in the contract must unequivocally be meant to cover claims between the contracting parties rather than third party claims.
  • Goshawk Dedicated Limited v. Bank of New York, 2010 WL 1029547 (S.D.N.Y. 2010) -- A very detailed case on New York law on determining whether an indemnification provision extends beyond third party claims (and related drafting pitfalls). The decision addresses issues including (i) who is a third party (in this case parties to related contracts, but not to the contract where the indemnity was provided, were not “strangers to the transaction” and therefore not third parties), (ii) whether the language clearly contemplated that claims of parties to the contract would be covered (including language such as duty to notify of claims and assume defense, which the court will view as indicia of intent to limit to third party claims) and (iii) whether third party claims were possible at the time the contract was entered into (e.g. an escrow agreement involving only the parties to the escrow might lead to interpretation of broad general language to cover the escrow agent's rights against another party to the escrow agreement)
  • Arcelormittal Cleveland, Inc. v. Jewell Coke Co. , 750 F. Supp.2d 839 (N.D. Ohio) – Purchaser sought reformation of mistake in long term contrast for supply of coke, arguing that numerator and denominator in a formula were reversed resulting in a premium rather than discounted price. . The court discussed the doctrines of mutual mistake (including scrivener's error) and unilateral mistake as grounds for recission or reformation of contract. While a unilateral mistake is not usually a basis for reformation of a contract, where it occurred due to a drafting error by one party and the other party knew of the error and took advantage of it, the court may reform the contract.
  • Peter Lampack Agency Inc. v. Grimes , 29 Misc.3d 1208(a), 2010 WL 3960602 (N.Y. Sup. Ct. 2010) – Merely declaring an agency (including a power of attorney) irrevocable has no effect in the absence of a coupled interest. Merely asserting the existence of an agency coupled with an interest will not overcome the presumption that an agency relationship may be terminated at any time. An agent can gain an interest in the subject matter of the agency relationship by obtaining a security interest in the property or by becoming a part owner of it. Having a right to payment of commissions based on future third–party payments or the right to reimbursement of expenses from those payments was not sufficient.
  • Harvard Drug Group, L.L.C. v. Senior Respiratory Solutions, Inc. , 2010 WL 148670, 2010 U.S. Dist. LEXIS 2640 (E.D. Mich. 2010) – A buyer entered into a security agreement in favor of seller in connection with a credit application. The security agreement was not extinguished by a subsequent prime vendor agreement that provided that it “canceled and superseded all earlier agreements, written or oral relating to the subject matter hereof.” The vendor agreement did not address the security interest and thus the security interest did not relate to the subject matter of the prime vendor agreement.

    Two recent decisions apply interpretive rules that might affect the interpretive process in some of HSBC Bank USA v. Bank of New York Mellon , 646 F.3d 90 (1st Cir. 2011) – The court interpreted an intercreditor agreement to determine whether the junior creditors had subordinated their claims to interest accruing on the senior debt after the common debtor had gone into bankruptcy. At the time the parties entered into the intercreditor agreement, the prevailing appellate law applied the “rule of explicitness.” Under that rule, a junior creditor did not subordinate its claim to post-petition interest on the senior debt unless the intercreditor agreement “explicitly” said so. The intercreditor agreement at issue did not “explicitly” provide that the junior debt would be junior to post-petition interest on the senior debt. The First Circuit held that the “rule of explicitness” had not survived the adoption of the Bankruptcy Code of 1978 (which preceded the agreement at issue) and thus the intercreditor agreement should be interpreted under ordinary principles of contract interpretation.

    However, in apply the rules of contract interpretation, the court held that the trial court should take into account the parties' understanding the of the applicable law at the time the intercreditor agreement was entered into, even if it turned out that the understanding was wrong:

    “. . . courts may determine the meaning of ambiguous terms based on the law in force at the time the agreements are made, as ‘the law in force . . . becomes . . . part of the agreement . . . and the contract will be construed in the light of such law.”

    Here the trial court determined that because it was widely (though it turns out incorrectly) understood that the “rule of explicitness” required an “explicit” provision for post-petition interest on senior debt to have seniority over the junior debt, the absence of such a provision was proper evidence of the intent of the parties that they did not intend at the time that the post-petition interest on the senior debt would be senior to the junior debt.
  • International Union, United Automobile, Aerospace & Agricultural Implement Workers of America v. ZF Boge Elastmetall LLC , _ F.3d _ (7th Cir. August 19, 2011) – The court had to determine the expiration date of a collective bargaining agreement. An employer and a union had entered into a collective bargaining agreement in 2005 (“2005 CBA”). In 2007 it entered into an agreement with the title “Agreements: ZF Boge Elastmetall/UAW 2343 regarding items discussed to influence the plant selection decision and long term viability of the Paris facility.” The 2007 agreement was set forth in the form of a chart, “placing the previously negotiated provision of the still-in-effect 2005 CBA next to the newly negotiated terms, topic-by-topic.” An issue arose as to whether the provisions of the 2007 agreement survived the expiration date of the 2005 CBA, or had an independent termination date.

    The court held that the interpretation of an agreement the court should examine:

    “ . . . the language, structure , history, and functions of the contract.” (emphasis added)

    The court held that the chart structure of the 2007 agreement:

    “leaves little doubt that it is intended as a modification to the existing CBA. . . . the clear intent of the structure was to alter specific provisions of the existing contract without doing violence to any of the unchanged terms of the then-existing CBA, including its expiration date.” (emphasis added)
  • First National Mortgage Co. v. Federal Realty Investment Trust , 631 F.3d 1058 (9th Cir. 2011) – “Final Proposal” signed by both parties and providing that “[t]he above terms are hereby accepted by the parties subject only to approval of the terms and conditions of a formal agreement” created an enforceable agreement to lease real estate with both put and call options, even though the term of the lease was not specified: the lease term could be implied from the put and call options.
  • Purcell Tire & Rubber Co. v. MB Financial Bank , 2011 WL 1258299 (E.D. Mo. 2011) – Bank's loan commitment letter was an enforceable contract. Despite clause in letter providing that the letter's terms “may not be waived or modified unless such waiver or modification is expressly stated . . . in writing,” factual dispute prevented summary judgment on whether the bank waived the requirement that the borrower provide a first-priority lien on its assets.
  • Interpharm, Inc. v. Wells Fargo Bank , 655 F.3d 136 (2d Cir. 2011) – Debtor that had executed several settlement agreements with its secured lender in which the debtor agreed to “waive, release and discharge any and all claims or causes of action, if any, of every kind and nature whatsoever” it may have against the secured lender was bound by those releases despite the debtor's claims of economic duress. There was no duress because the secured lender had made no wrongful threat that deprived the debtor of its free will. The secured lender may have insisted on onerous terms after the debtor defaulted under the loan agreement, but such insistence is not wrongful given that the secured lender did not cause the debtor's default.
  • Schron v. Grunstein , 917 N.Y.S.2d 820 (N.Y. Sup. Ct. 2011) – Option agreement and credit agreement executed the same day by substantially the same parties and later amended on the same day were to be regarded as separate agreements, in part because of the lack of cross-references and the existence of a merger clause in the option agreement. As a result, funding the loan pursuant to the credit agreement was not a condition precedent to the enforceability of the option agreement.
  • In re FH Partners, L.L.C. , 335 S.W.3d 752 (Tex. Ct. App. 2011) – Although agreements to extend credit are not normally assignable by the debtor without the creditor's consent, the creditor's rights are assignable without the debtor's consent unless the agreements indicates to the contrary. As a result, bad debt specialist that acquired bank's interest in line of credit was entitled to enforce jury waiver clause.
  • In re Bank of New England Corporation , 646 F.3d 90 (1st Cir. 2011) – Where subordination agreement did not explicitly provide that subordinated creditors were subordinate to senior creditors with respect to interest payments owing post-insolvency/post-petition, there was no subordination. The court cited an internal law firm drafting manual for indentures as evidence that there was “institutional knowledge” of the “Rule of Explicitness” requiring post-petition interest payments to be expressly prioritized as well as the then common (albeit) understanding of the law.

B. Adhesion Contracts, Unconscionable Agreements, Good Faith and Other Public Policy Limits, Interference with Contract

  • Tourneau LLC v. 53rd & Madison Tower Development LLC , 27 Misc.3d 953, 896 N.Y.S.2d 631 (N.Y. Sup. Ct. 2010) – Commercial tenant claimed that lease violated rule against perpetuities and therefore void. Court disagreed, finding that the terms of the contract required landlord's performance (completion of renovated premises and commencement of tenancy) within less than 21 years plus lives in being.
  • Wachovia Bank N.A. v. Preston Lake Homes, LLC, 750 F.Supp.2d. 682 (W.D. Va. 2010) – Implied duty of good faith that bank owed to borrower in connection with financing, which bank had agreed to provide for a definite two year period, did not obligate the bank to enter into an entirely new agreement by renewing or extending the existing financing. Any oral promise of the bank to renew was unenforceable under Virginia law, as a violation of the statute of frauds.
  • BKCAP, LLC v. Captec Franchise Trust 2000-1 , 701 F.Supp.2d 1030 (N.D. Ind. 2010) -- A provision requiring borrower to pay lender's attorneys fees in connection with enforcement did not apply to fees lender incurred when borrower brought a declaratory judgment action as to interpretation of the agreement and otherwise sought to enforce borrower's rights. “American rule” is a presumption against reimbursement of attorneys fees.
  • Volvo Construction Equipment Rents, Inc. v. NRL Rentals, LLC , 2011 WL 2490999 (D. Nev. 2011) – Settlement agreement covering “all manner of actions . . . claims and demands whatsoever, of whatever kind and nature, whether absolute or contingent, known or unknown, matured or unmatured, at law, in equity” did not cover contractual debt acquired by assignment seventeen months after the settlement agreement was signed.
  • Radiant Skincare Clinic v. Moore , 2011 WL 11021 (Cal. Ct. App. 2011) – Clause in contract between medical services corporation and independent contractor by which independent contractor promised to indemnify corporation for expenses, including attorney's fees, incurred in defending claims of third persons, did not give corporation a right to attorney's fees incurred in successfully suing the independent contractor for breach and related torts.
  • Bank of America v. Jill P. Mitchell Living Trust U/A DTD 06.07.1999 , 2011 WL 5386379 (D. Md. 2011) – Fixed-rate loan agreement that required the borrowers, upon prepayment, to also pay a breakage fee defined as “the cost or expense incurred by the Bank as a result of the payment,” was ambiguous as to whether the fee included the prospective loss the bank incurs due to a decline in interest rates and the resulting inability to re-lend the funds at the fixed rate.
  • In re Sokolik , 635 F.3d 261 (7th Cir. 2011) – Loan agreement in which debtor promised to pay “all reasonable collection costs, including attorney's fees and other charges, necessary for the collection of any amount not paid when due” covered attorney's incurred in successfully challenging the dischargeability of the debt.
  • In re Steel Network, Inc. , 2011 WL 4002206 (Bankr. M.D.N.C. 2011) – Loan agreement that provided for the borrower to pay the lender's attorney's fees “in connection with the enforcement or preservation of any rights or remedies under [the loan documents” as well as those “related to the preservation, protection or enforcement of any rights” of lender in a bankruptcy proceeding did not cover attorney's fees incurred in defending an action for tortious interference with contract filed against the lender by a shareholder of the borrower.
  • Synectic Ventures I, LLC v. EVI Corp. 261 P.3d 30 (Or. Ct. App. 2011) – Creditor that sought award for attorney's fees in successfully bringing action on a promissory note and security agreement was not entitled to attorney's fees incurred in successful appeal because a contractual provision on attorney's fees must expressly reference appellate proceedings to cover fees incurred during an appeal.
  • Wells Fargo Bank, N.A. v. LaSalle Bank Nat'l Ass'n , No. CIV-08-1125-C, 2011 U.S. Dist. LEXIS 93927 (W.D. Okla. Aug. 23, 2011) – The court investigated whether repurchase agreement in a CMBS transaction, requiring the seller of mortgages to repurchase non-complying loans at the purchase price plus interest and costs, constituted either an impermissible requirement of specific performance or unenforceable liquidated damages. The court also cited competing CMBS precedent in concluding that on facts of this case, failure by the purchaser to mitigate damages should only offset the requirement to repay the purchase price as a result of any failure by the special servicer to service the loans post-default.
  • Lehman Bros. Holdings Inc. v. Bethany Holdings Group, LLC , 10 Civ. 4373 (SHS), 2011 U.S. Dist. LEXIS 86786 (S.D.N.Y. Aug. 5, 2011) – Jury trial waivers in guaranties are enforceable where the guarantor had sufficient bargaining power and “business acumen”. The guarantor had authorized his attorney to attach his pre-signed signature page and the jury trial waiver was sufficiently conspicuous.

C. Choice of Law

  • General Retirement System of the City of Detroit v. UBS, 2011 U.S. Dist. LEXIS 70639 (E.D. Mich. 2011) (Court upholds New York choice of law where there were no New York contacts and there were alleged public policy issues on the grounds that given New York's highly developed body of commercial law, the choice was reasonable; court also evaluates various pension fund investor claims against investment banks that sold it Acadia CLO securities, dismissing most of the claims).
  • Ex parte Textron, Inc. , 67 so. 3d 61 (Ala. 2011) – Secured party did not, by bringing detinue action in Alabama, waive clause in security agreement making Rhode Island the exclusive forum for “all purposes in connection with” the financing agreement because Rhode Island had no jurisdiction over the collateral located in Alabama and such an exception to the forum-selection clause was necessary to harmonize it with the clause granting the secured party the right to repossess the collateral. The forum-selection clause was broad enough to cover tort claims against parent of secured party. However, guarantors' consent to jurisdiction and venue in Rhode Island was not an exclusive jurisdiction clause and thus claim by guarantors would not be dismissed.
  • Camelot Entertainment Inc. v. Incentive Capital LLC , 2011 WL 4477317 (C.D. Cal. 2011) – Mandatory forum selection clause in security agreements was binding even though the debtor's note contained a non-exclusive forum selection clause and the parties' escrow agreement contained no forum selection clause because the debtor's claim related to the collateral and was therefore inextricably bound up with the security agreements.
  • M.L. Private Finance LLC v. Minor , 2011 WL 1900613 (S.D.N.Y. 2011) – Debtor that had paid all the principal and accrued interest on the secured obligation was entitled to a discharge of the receivership over and security interest in remaining collateral despite secured party's claim that contingent obligations remained for indemnification relating to a separate action against the secured party for unfair debt collection practices. Although the loan and security agreements defined the secured obligation to include “all of the indebtedness, liabilities and obligations of the Borrower to the Lender . . . whether now existing or hereafter rising, whether or not . . . contingent,” such language does not encompass anything and everything that might happen in other fora.
  • Plainfield Specialty Holdings II Inc. v. Worldwide Water, Inc. , 2011 WL 1005008 (Wash. Ct. App. 2011) – Receiver could abandon all assets of the debtor not sold – including claim against the secured lender – to the lender. Appellate court would not consider on appeal arguments not made to the trial court, and thus would not consider: (i) argument that claim – for which no complaint had ever been filed – was not a contract claim but a commercial tort claim outside the scope of the lender's security interest; or (ii) that even if the lender had a security interest in the claim, abandonment to the secured lender is not consistent with Article 9's enforcement methods. Heartland Cement Co. v. Ultimax Cement Corp. , 2011 WL 239660 (E.D. Pa. 2011) – Clause providing for arbitration of “[a]ny controversy or claim arising out of or relating to” Distribution Agreement did not require arbitration of claim to enforce Supply Agreement and Security Agreement even though the Distribution Agreement expressly authorized debtor to setoff amounts owed under the Supply Agreement with amounts due under the Distribution Agreement. The Supply and Security Agreements are not so intertwined as to make them depend on each other for their existence: the Security Agreement exists only to secure the credit line provided for in the Supply Agreement whereas the Distribution Agreement grants a license to distribute certain products.
  • Alabama Title Loans, Inc. v. White , 2011 WL 2739652 (Ala. 2011) – Debtor who claimed repossession agent assaulted her and repossessed car after loan had been paid in full had to arbitrate claim because the loan agreement provided that its arbitration clause “shall survive the repayment of all amounts owed” and because the arbitration clause covered all claims, including tort claims, that “relate[] to this Agreement or the Vehicle,” not merely those arising under the contract.
  • Shah v. Santander Consumer USA, Inc. , 2011 WL 5570791 (D. Conn. 2011) – Language in security agreement that provided for arbitration of any “claim or dispute arising from this Contract of whatever nature” was a broad clause even though it did not refer to disputes “relating to” the agreement or the parties' relationship, and it therefore encompassed the debtor's action for the secured party's alleged failure to comply with state statutes requiring a post-repossession notice and disclosure of certain consumer rights even though such an action did not require interpretation of the security agreement.
  • Huffman v. Credit Union of Texas , 2011 WL 5008309 (W.D. Mo. 2011) – The statutory damages available under § 9‑625 do not make that provision a penal statute and therefore the limitations period in Missouri for a claim based on an allegedly deficient pre-sale notification was the general 5-year period for actions relating to “liability created by a statute other than a penalty.”
  • Capital One Bank v. Fort , 255 P.3d 508 (Or. Ct. App. 2011) – Statute providing that any one-sided attorney's fee clause in a contract was reciprocal, thereby entitling the prevailing party to attorney's fees from the non-prevailing party, was fundamental policy of the state and overrode choice-of-law clause in consumer's credit card contract.
  • AmerisourceBergen Drug Corp. v. Ciolino Pharmacy Wholesale Distributors, LLC , 2011 WL 2039000 (E.D. Pa. 2011) Because the parties' supply agreement, which lacked a forum-selection clause, “supercede[d] prior oral or written agreements by the parties that relate to its subject matter,” the forum-selection clause in the earlier credit agreement between the parties was invalidated.
  • AT&T Mobility LLC v. Concepcion , 131 S. Ct. 1740 (S. Ct. 2011) – State law could not treat an arbitration clause as unconscionable and unenforceable merely because the clause prohibits classwide proceedings. The FAA permits agreements to arbitrate to be invalidated by generally applicable contract defenses – such as fraud, duress, or unconscionability – but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.
  • Center of Hope Christian Fellowship v. Wells Fargo Bank , 781 F. Supp. 2d 1075 (D. Nev. 2011) – Clause in agreement providing that the agreement's arbitration clause “does not limit the right of any party to . . . foreclose against real or personal property collateral” did not constitute a waiver of the right or obligation of any party to submit any dispute to arbitration, in part because the debtor disputed whether a default had occurred. Separate clause providing that no dispute concerning the debt will be submitted to arbitration unless the mortgagee so elects was substantively unconscionable because it was one-sided.
  • Mims v. Global Credit and Collection Corp. , 2011 WL 3586056 (S.D. Fla. 2011) – Debt collector could not enforce arbitration clause in contract between debtor and creditor, even though the clause purported to cover the creditor's “successors, assigns, agents and/or authorized representatives.” The debt collector was not a successor or assign, it was not a third-party beneficiary, and because its agreement with the creditor expressly declared it to be an independent contractor, not “the agent or legal representative of” the creditor, it was also not an authorized representative.
  • Rivera v. American General Financial Services, Inc. , 259 P.3d 803 (N.M. 2011) – Arbitration clause in consumer loan contract that excepted foreclosure and repossession – the only remedies the creditor was likely to need – was so substantively unconscionable that it was void without considering whether the provision was also procedurally unconscionable.
  • Wells Fargo Bank v. Maynahonah , 2011 WL 3876255 (W.D. Okla. 2011) – Because tribe had agreed to contractual dispute resolution procedures, including arbitration, and waived the doctrines of exhaustion of tribal remedies, tribal Gaming Commission could not, through its rule-making authority, interfere with arbitration proceeding in which assignee of lessor's rights under a lease of casino equipment sought to enforce those rights.
  • General Retirement System of the City of Detroit v. UBS , 2011 U.S. Dist. LEXIS 70639 (E.D. Mich. 2011) – Court upholds New York a choice of law where there were no New York contacts and there were alleged public policy issues on the grounds that given New York's highly developed body of commercial law, the choice was reasonable. Restatement Conflict of Laws (Second) § 187.

D. Arbitration

  • Nachimani v. By Design, LLC , 901 N.Y.S.2d 838 (2010) – A clause in a contract stating that any dispute would be settled by binding arbitration in accordance with the commercial rules of the American Arbitration Association (AAA) was only a “choice of law” clause and not an agreement that the arbitration be administered by the AAA. The parties conduct (initiating the arbitration process without referring the matter to AAA for administration) and other aspects of the parties pursuit of the case may have influenced the court's interpretation of the provision, which differed from the holding in a number of prior cases.

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