You are here: / / ALTHOUGH PLAINTIFF ALLEGED FRAUDULENT INDUCEMENT, THE ESSENCE OF THE LAWSUIT...
,

ALTHOUGH PLAINTIFF ALLEGED FRAUDULENT INDUCEMENT, THE ESSENCE OF THE LAWSUIT IS THE ALLEGED BREACH OF THE CONTRACTS; THIS IS NOT A CASE WHERE IT IS ALLEGED THE FRAUDULENT INDUCEMENT NULLIFIED THE CONTRACTS; THEREFORE THE JURY-TRIAL WAIVER PROVISIONS REMAIN ENFORCEABLE (FIRST DEPT). ​

The First Department, in a full-fledged opinion by Justice Kapnick, determined the “fraudulent inducement” claim in this breach of contract action was covered by the contractual waiver of a jury trial. The First Department distinguished this case, which is in essence a “breach of contract” action, from cases where fraudulent inducement is alleged to have nullified the entire agreement. The contracts here involved the manufacture of semiconductor chips by defendant GlobalFoundries for plaintiff IBM:

From 2013 to June 2015, plaintiff International Business Machines Corporation (IBM) and defendant GlobalFoundries U.S. Inc., a manufacturer of semiconductors, engaged in discussions concerning a collaborative venture whereby IBM would transfer its microelectronics business, including technology, engineers and employees, to GlobalFoundries, along with a sum of $1.5 billion, and GlobalFoundries would develop, manufacture and supply next generation 14nm and 10nm high performance semiconductor chips for IBM. * * *

… [W]here a claim of fraudulent inducement challenges the validity of the agreement, a provision waiving the right to a jury trial in litigation arising out of the agreement may not apply … . This Court has taken care to distinguish between actions where the primary claim is fraudulent inducement and the validity of the entire contract is clearly being challenged … , and actions that do not challenge the validity of the contract but rather seek to enforce the underlying contract by obtaining damages for fraudulent inducement … . The present case falls into the latter category. * * *

It is clear from IBM’s complaint that its primary claim is not fraudulent inducement but rather breach of the agreements. International Business Machs. Corp. v GlobalFoundries U.S. Inc., 2024 NY Slip Op 06425, First Dept 12-19-24

Practice Point: It is possible that fraudulent inducement can nullify an underlying contract rendering all of the contract provisions unenforceable. Here however, although fraudulent inducement was alleged, the essence of the suit is the alleged breach of the underlying contracts. Therefore, the jury-trial waiver provisions remain enforceable.

 

You might also like
Wife’s Derivative Claim Added to Complaint After Expiration of Statute of Limitations
16-Ounce “Portion Cap Rule” for Sugary Drinks Invalid
Plaintiff Judgment-Creditor’s Action Under the Debtor Creditor Law to Recover Payment Made to a Limited Partner Time-Barred by Three-Year Statute of Limitations in the Revised Limited Partnership Act (RPLA)
Usual Criteria for Piercing the Corporate Veil Applied in Fraudulent Conveyance Action
DEFENDANT’S SUBCONTRACTOR USED A PAINT STRIPPING PRODUCT DURING AN OFFICE BUILDING RENOVATION, PLAINTIFF, AN EVENING OFFICE CLEANER, ALLEGED INJURY FROM BREATHING TOXIC FUMES, THERE IS EVIDENCE DEFENDANT HAD A DUTY TO WARN, DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PROPERLY DENIED (FIRST DEPT).
ABSENT FRAUD OR COLLUSION, STRICT PRIVITY PRECLUDES THE PROSPECTIVE BENEFICIARIES OF AN ESTATE FROM BRINGING A LEGAL MALPRACTICE ACTION AGAINST THE ATTORNEY WHO PLANNED THE ESTATE; THE ATTORNEY OWED NO DUTY TO THE BENEFICIARIES (FIRST DEPT). ​
THE COMPLAINT STATED A CAUSE OF ACTION AGAINST PORT AUTHORITY FOR FAILING TO INSTALL FENCING TO PREVENT PLAINTIFFS’ DECEDENTS FROM COMMITTING SUICIDE BY JUMPING FROM THE GEORGE WASHINGTON BRIDGE (FIRST DEPT). ​
FIREFIGHTER’S DEATH DURING A TRAINING EXERCISE NOT ACTIONABLE UNDER GENERAL MUNICIPAL LAW 205-a AND LABOR LAW 27-a (FIRST 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

IN THIS JUVENILE DELINQUENCY PROCEEDING, THE JUVENILE’S BEHAVIOR—LOOKING... THE ZONING BOARD’S DENIAL OF A USE VARIANCE FOR CONSTRUCTION OF A SOLAR...