In most contracts, there is specific language regarding how and when a notice to the other party are to be sent. For example, the agreement might specify that notice of termination be given to a certain individual, sent by mail, and/or provided at least 30 days in advance of taking an action. The terms of the contract will often state that the requirements must be strictly complied with in order for the notice to be valid. However, several courts have determined that parties are not required to comply with notice provisions in certain instances. As demonstrated in these cases, the rule seems to be that as long as the notice is received, and the recipient is not prejudiced by the way it was sent, the notice will be deemed valid.
A good example of this is the case of Iskalo Elec. Tower LLC v. Stantec Consulting Services, Inc. In Iskalo, the parties had entered into an agreement pursuant to which Plaintiff was to lease a commercial property, which it did not yet own, to Defendant, commencing on a particular date. The agreement contained a clause which permitted Plaintiff to notify Defendant if it could not make delivery by such date, in which case, Defendant would be required to accommodate the delay by waiting until the premises could be delivered. When Plaintiff was unable to make delivery by the date in question, Defendant terminated the lease and Plaintiff commenced an action because of such termination.
Among Defendant’s arguments was that Plaintiff failed to comply with the agreement’s notice provision. The New York Appellate Division, Fourth Department, however, rejected that argument finding that although the required notice was sent by facsimile to the recipient’s corporate counsel (and not to the Chief Executive Officer, as required under the agreement), “strict compliance with the notice provision of the lease was not required inasmuch as [the recipient] does not contend that it did not receive actual notice, nor does it contend that it was prejudiced by the deviation.” As a result, the Court granted Plaintiff partial summary judgment.
Similarly, in Dellicarri v. Hirschfeld, the Appellate Division, Third Department found that Plaintiff could recover her deposit despite failing to comply with notice provisions. Plaintiff signed a contract to buy property and had until a certain date to procure her mortgage. If she could not obtain a mortgage, she was required to notify the seller in writing sent by certified or registered mail and either request her money back or an extension of time. Plaintiff did not send notice, but during a conversation between her lawyer and the seller’s lawyer, the seller’s lawyer orally agreed to extend the date. When Plaintiff was still unable to get the commitment, her lawyer requested her money back by letter (but not as a certified or registered letter). The seller refused and Plaintiff sued. The lower court ruled in favor of the seller, but the appellate court reversed stating that because the seller received the notice and was not prejudiced by it not being sent via certified or registered mail, the letter was still effective in cancelling the contract. Having properly cancelled the contract, Plaintiff was entitled to the deposit back.
The Appellate Division, Second Department also has affirmed the principle that a party may not be required to strictly comply with notice provisions. In Suarez v. Ingalls, Defendant cancelled the contract for the sale of real property on the ground that Plaintiff had failed to obtain the mortgage commitment within the time provided for therein. Plaintiff claimed Defendant’s notice was ineffective because it was not sent by certified mail, as required by the contract. The Court noted that strict compliance with contract notice provisions is not required when the recipient of the notice does not claim that she did not receive actual notice or was in some way prejudiced by the way the notice was sent. Here Plaintiff acknowledged receipt and could establish no prejudice. Accordingly, Plaintiff’s lawsuit was dismissed.
Many contracts are extremely complicated and contain provisions which parties believe cannot be changed. However, the courts sometimes interpret contract language differently than what the words say.
If you are unsure of your rights under an agreement which you have entered, please contact one of our business attorneys.