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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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Commercial Bankruptcy Filings On the Rise Due to Economic Turbulence
By Erich N. Durlacher
With the recent economic turbulence and pessimism, prudent lenders should be bracing themselves for the coming storm by adopting a five-point “CAPER” strategy: Communicate, Analyze, Preserve, Execute, and Resolve.
Specific Performance Clause May Not Be Enforced In Sale-Leasebacks
By Peter E. Fisch and Salvatore Gogliormella
Specific performance is an important remedy in real estate transactions, however, it is disfavored by the courts and under certain circumstances (particularly in the case of sale-leasebacks), a specific performance clause, even if properly drafted, may not be enforced by the courts.
Bankruptcy Court Opens Door for Tenants to Assume Leases After a Pre-Bankruptcy Eviction Warrant
By Paul A. Rubin and Hanh V. Huynh
A recent decision in a Chapter 11 bankruptcy case in the U.S. Bankruptcy Court for the Southern District of New York highlights the significant impact that a 2019 amendment to the New York Real Property and Procedures Law will have on future disputes in bankruptcy cases where the tenant files for bankruptcy after the issuance of a warrant of eviction but before its execution.
The Real Estate Leasing Lawyer’s Role In an M&A Deal With a Reps & Warranties Policy
By Aaron L. Pawlitz
This article provides an overview of the most commonly-accepted purposes of an RWI policy and an overview of the RWI policy underwriting process.
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