Email Stating "Understood and Will Do" Not, as a Matter of Law, Waiver Under Contract

On January 21, 2025, Justice Margaret A. Chan of the New York County Commercial Division issued a decision in Newmark & Co. Real Estate, Inc. v. Wiesner Products Inc., Index No. 651896/2024, denying defendant's motion to dismiss based on documentary evidence and holding that, contrary to defendant's argument, an email from defendant stating "Understood and will do" in response to plaintiff's purported improper termination of an exclusive-brokerage agreement was not, as a matter of law, a waiver by defendant of strict compliance with the term and termination clauses of the agreement, explaining:

Here, under a motion to dismiss standard, the evidence does not conclusively establish that plaintiff waived strict compliance with the term and termination clauses. In particular, there acts or statements of consent to the termination are equivocal (see Keitel, 153 AD3d at 1182 [cannot infer waiver from "doubtful or equivocal act(s)"]). It is true that every time Jha said the Agreement would terminate and that Korman should prepare a new one, Korman responded that he understood and would follow Jha's instructions (see NYSCEF # 11 at *2 ["Understood and will do"]; NYSCEF # 18 ["On it Boss! Thank you"]). It is also true that Korman soon sent a new draft Agreement in the form of the Proposed Agreement (NYSCEF # 19). But none of these acts or statements amounts to a "clear manifestation of intent" to waive strict compliance with the Termination Clause (Lynch, 224 AD3d at 481; see also Condor Funding, LLC v 176 Broadway Owners Corp., 147 AD3d 409, 411 [1st Dept 2017] [finding no waiver because "[o]n the one hand, the record is bereft of any objection by plaintiff to defendant's repeated warnings that the covenant would be terminated. On the other hand, there is likewise no express statement of plaintiffs consent to that termination."]). They are at best strong evidence that will benefit from further exploration during discovery.

While the court here denied defendant's motion to dismiss--which relied on plaintiff's purported waiver of clauses in the agreement prohibiting termination at the time plaintiff purported to do so--it also noted that the evidence on which defendant relied was potentially "strong evidence" of waiver. Thus, it is important for a party responding to a counterparty's purported improper termination of an agreement to make clear that the termination is improper and that the party is not waiving any of its rights under the agreement. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning claims of waiver of contractual rights.