You are here: / / UNDER CALIFORNIA LAW A CONTRACT WITH MUTUAL CANCELLATION CLAUSES IS VALID;...

UNDER CALIFORNIA LAW A CONTRACT WITH MUTUAL CANCELLATION CLAUSES IS VALID; THEREFORE THE CANCELLATION BY DEFENDANT WAS NOT A BREACH OF THE CONTRACT OR THE COVENANT OF GOOD FAITH (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the contract, which required the application of California law, and which included mutual cancellation clauses, was valid. Therefore cancellation by the defendant was not a breach of the contract or the covenant of good faith:

Contrary to the plaintiff’s contention, the terms of the agreement in this case expressly permitted cancellation by either party during the initial one-year term, and the complaint therefore fails to state a viable cause of action for breach of contract. Pursuant to California law, contracts with mutual cancellation provisions are not illusory … , and contracts that provide for a fixed duration but that also contain an express clause for termination at will are not inconsistent … . …

… [T]he cause of action alleging anticipatory breach seeks damages for losses allegedly arising from the defendant’s failure to renew the term of the agreement. However, since the defendant properly cancelled the agreement during the initial term, there can be no recovery for anticipatory breach of contract based on any subsequent nonrenewal … . …

“It is universally recognized the scope of conduct prohibited by the covenant of good faith is circumscribed by the purposes and express terms of the contract” … , and the Supreme Court of California has noted that it is “aware of no reported case in which a court has held the covenant of good faith may be read to prohibit a party from doing that which is expressly permitted by an agreement” … . A.D.E. Sys., Inc. v Energy Labs, Inc., 2020 NY Slip Op 02911, Second Dept 5-20-20

 

You might also like
ARGUMENTS FIRST RAISED IN REPLY PAPERS PROPERLY REJECTED (SECOND DEPT).
THE “TIME WHEN” THE ALLEGED SEXUAL ABUSE TOOK PLACE IN 1997 WAS ADEQUATELY ALLEGED IN THE CLAIM IN THIS CHILD VICTIMS ACT SUIT (SECOND DEPT).
THE LEG OF A LARGE DECORATIVE THRONE IN DEFENDANT’S BAR WAS OPEN AND OBVIOUS AND THEREFORE WAS NOT AN ACTIONABLE TRIPPING HAZARD; PLAINTIFF HAD FREQUENTED THE BAR AND THE THRONE WAS READILY OBSERVABLE (SECOND DEPT).
AN ENTRY IN A HOSPITAL RECORD INDICATING PLAINTIFF FELL DOWN A FEW STAIRS WAS NOT GERMANE TO TREATMENT OR DIAGNOSIS AND WAS NOT AN ADMISSION BECAUSE THE SOURCE OF THE ENTRY WAS UNKNOWN; NEW TRIAL ORDERED IN THIS SLIP AND FALL CASE (SECOND DEPT).
Passengers in Car Struck from Behind Entitled to Summary Judgment Despite Issue of Comparative Fault on the Part of the Driver of the Car in which They Were Passengers
Father’s Consent to Adoption Not Required
THE TRIAL JUDGE DID NOT CONDUCT AN ADEQUATE INQUIRY BEFORE ALLOWING DEFENDANT TO REPRESENT HIMSELF (SECOND DEPT).
THE FAILURE TO INCLUDE THE PHONE NUMBER FOR THE NYS DEPARTMENT OF FINANCIAL SERVICES IN THE RPAPL 1304 NOTICE OF FORECLOSURE RENDERED THE NOTICE FACIALLY DEFECTIVE; DEFENDANT ENTITLED TO SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION (SECOND DEPT).

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

JUDGE SHOULD NOT HAVE SEARCHED THE RECORD AND, SUA SPONTE, GRANTED RELIEF NOT... DEFENDANT FAILED TO DEMONSTRATE IT DID NOT HAVE CONSTRUCTIVE NOTICE OF THE BROKEN...