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Naldi v. Grunberg - 2010 NY Slip Op 7079, 80 A.D.3d 1, 908 N.Y.S.2d 639 (App. Div.)

Rule:

The terms "writing" and "subscribed" in General Obligations Law § 5-703 should be construed to include, respectively, records of electronic communications and electronic signatures.

Facts:

Robert Naldi sent Grunberg 55 LLC (Grunberg 55), a letter purporting to exercise his right of first refusal, which was referenced in an e-mail sent by Grunberg 55’s broker to Naldi's broker. Grunberg 55 rejected the offer and sold the property to another buyer. Naldi sued Grunberg 55 for breach of contract. Grunberg 55 moved to dismiss the complaint pursuant to CPLR 3211(a)(5) and (7). The Supreme Court, New York County, New York, denied the motion; Grunberg 55 appealed.

Issue:

Was the alleged right of first refusal memorialized in an e-mail enforceable?

Answer:

Yes

Conclusion:

The appellate court rejected Grunberg 55's argument that the alleged right of first refusal was not enforceable under the statute of frauds, General Obligations Law § 5-703, because it was memorialized in an e-mail only. The requirement of 15 U.S.C.S. § 7001(a) of the Electronic Signatures in Global and National Commerce Act, 15 U.S.C.S. § 7001 et seq., that an electronically subscribed contract be given the same legal effect as a contract subscribed on paper, was part of New York law, whether or not the transaction affected interstate or foreign commerce. However, the record, including Naldi's admissions and the documentary evidence of the parties' dealings, established as a matter of law that Naldi never accepted the right of first refusal proposed in the e-mail. Thus, there was never a meeting of the minds between the parties on the terms of the proposed right of first refusal, and an alleged oral right of first refusal was unenforceable.

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