Intercontinental Planning, Ltd. v. Daystrom, Inc.

Intercontinental Planning, Ltd. (Intercontinental) (plaintiff), a New York corporation, sued Daystrom, Inc. (defendant), a New Jersey corporation, in New York to collect payment of a finder’s fee that Daystrom agreed to pay Intercontinental if Daystrom entered a business relationship with a French electronic firm, Rochar Electronique. Rochar met Jakob, the president of Intercontinental, in New York and indicated that it wanted an affiliation with an American company. Jakob placed an ad seeking such a firm, and Daystrom responded. Jakob then set up a meeting between the presidents of the two companies in New York, and after several letters and telephone calls between Jakob in New York and Daystrom in New Jersey, the parties agreed on the amount of a finder’s fee for Intercontinental if Daystrom and Rochar formed a business relationship. Jakob traveled to New Jersey and signed the agreement there, but another company, Schlumberger, acquired Rochar. Jakob encouraged Daystrom to negotiate with Schlumberger. Intercontinental alleged that Daystrom’s president orally agreed to extend the finder’s fee agreement to a merger between Daystrom and Schlumberger that subsequently took place. Under New York law, an oral agreement for a finder’s fee is unenforceable under its statute of frauds. Intercontinental alleged that New Jersey law had no statute of frauds that would bar its claim for the finder’s fee. The lower courts applied New York law, and Intercontinental appealed.