Category Archives: Oral Agreements

Colossal Kerfuffle Over Ownership of Falafel Café:

This was originally posted on the SGR Blog.

Was Hand-Written Note an Enforceable Contract of Sale?

Andres Tobon sued Pita Off The Corner, Inc., Falafel Off the Corner, Inc. Leor Yohanan, Miriam Yohanan and other members of their family for breach of contract, unjust enrichment, and fraud, arising from the failed sale of a Manhattan falafel restaurant. Tobon moved for summary judgment on his second and third causes of action in the principal sum of $50,000.

In support of his application, Tobon submitted the verified complaint. The attorney-verified answer with counterclaim; an attorney’s affirmation; a transcript of an appearance by Tobon by counsel, and Leor Yohanan, pro se, before Justice Kathryn Freed on an order to show cause filed by Tobor in a prior action; and a one-page, undated, handwritten document signed by Leor and purporting to memorialize the terms of the sale of the falafel restaurant to him.

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Four Recent Lessons in Vendor/Purchaser Disputes – Waivers, Architects, Reliance, and Porcupines

By Victor Metsch


In Diplomat Properties L.P. v. Komar Five Associates LLC, 899 N.Y.S.2d 237 (1st Dept. April 29, 2010), the First Department considered the sale of the $620 million Diplomat Hotel and Convention Center and related facilities in Hollywood and Hallandale Beach, Fla.

The defendant purchaser, in connection with an extension of the closing date from Aug. 1, 2007, executed an amendment to the lease acknowledging that its due diligence period had ended on June 4, 2007.

The defendant then failed to close.  It argued that the plaintiff had violated numerous contract provisions, the most notable of which was a failure to disclose an alleged agreement with the city of Hallandale that future development of the property be phased in over a 10-year period.

But the city of Hallandale twice confirmed that, notwithstanding discussions of any restrictions, there was no agreement between it and the seller to limit development on the building in any way.1

Given this position by the city, Komar’s claim that its obligations under the contract never came due because of the plaintiff seller’s nonperformance was little more than a nominal defense, thrown up in the slim hope of recovering $30 million in contract deposits.

But by agreeing, in connection with the extension of the closing date, to waive due diligence objections, Komar effectively offered its nominal defense to the court in one hand while offering $30 million to the plaintiff with the other.

The lesson here?  Before waiving due diligence objections, consider the whole deal and, if the client might want to back out, keep in mind that the waiver will surrender many nominal defenses.

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