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Parties in complex commercial cases that are accused of defaulting on or breaching a contract may invoke the defense of impossibility, arguing that performance of contractual obligations was rendered impossible by an intervening event. Under New York law, those arguments rarely make it past the motion stage. Courts apply the doctrine narrowly, only to executory contracts and only where the intervening event was both unforeseeable and destroyed either the contract’s subject matter or the means of performance. The related doctrine of frustration of purpose may apply more broadly, but only where it would make little sense to perform on a contract because of an intervening event. The narrowness of these doctrines — and their questionable utility for litigators — underscores the importance of striving during the contract drafting process to include contingency clauses providing for foreseeable possibilities and language making clear the contract’s purpose.
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By Peter E. Fisch and Mitchell L. Berg
The purpose behind rent reset clauses is simple — to capture any change in the fair market value (and fair market rental value) of the leased property. However, the application of rent reset clauses in practice is anything but simple, and the consequences of such clauses can be significant.
By Jeffrey B. Steiner and Scott A Weinberg
Federal programs have made insurance more readily accessible to protect real property in the event of a flood or an act of terrorism. These programs enable flood and terrorism insurance to be widely available at realistic price points by ensuring that the amount of the premiums payable for such insurance remain at a level that a borrower can afford, which in turn preserves the underwritten economics of the loan transaction.
By Steven M. Silverberg
A landowner challenged local zoning that banned holding a three-day music festival, arguing that the law was an unconstitutional violation of free speech and void for vagueness.
By Carmen Contreras-Martinez
Because bankruptcy can add significant expenses and increase the time it takes to remove a delinquent tenant, landlords should not allow tenants to fall far behind on rental payments. Here are some tips on how to address the issues raised by a bankrupt tenant.