GEAB&P Client Alert: Stonehill Capital – a message of caution to negotiating parties who seek to avoid binding obligations in the absence of final, written agreements by stating that transactions are “subject to” execution of a final contract.

It is not unusual for parties negotiating a transaction to state that a binding agreement is “subject to” the execution of a final, written contract.  The New York Court of Appeals’ recent decision in Stonehill Capital Management v. Bank of the West carries a message of caution for negotiating parties who rely on such language to defer any binding obligations until the parties have signed a final, written agreement. To view the Alert, click here.