New York Breach of Faith Clauses, Penalties, Public Order, Tort: Part II

Part II continues here by examining whether a breach of trust clause is enforceable in New York.

predictability. Compensation for foreseeable emotional distress is the undeniable motivator behind the breach of trust clause. “In determining the reasonable considerations of the parties, account should be taken of the nature and purpose of the contract and the circumstances known to the parties; and those damages which are not alien to a disclosed or obvious purpose, or which could reasonably have been feared from the breach, or which were within the fair purview of the Agreement to prevent or avoid, are direct and should be awarded. It is reasonable to assume that such damages were within the scope of the considerations and intentions of the parties at the time of the conclusion of the contract; and therefore they constitute only fair and equitable compensation to the plaintiff for the loss and do not place the defendants with any greater liability than they wished to assume when concluding the agreement.” Mortimer v. Otto, 206 NY 89, 91-92 (1912 ).

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