Van Wagner Advertising Corp. v. S & M Enterprises
Court of Appeals of New York
492 N.E.2d 756 (N.Y. 1986)
Barbara Michaels entered into a contract to lease the façade of her building to Van Wagner Advertising (Van Wagner) (plaintiff). The contract contained a provision under which the lease could be cancelled if Michaels sold the building to a third party. Subsequently, Van Wagner contracted with a third party to sell the space for advertising. The next year, Michaels sold the building to S & M Enterprises (S & M) (defendant) and S & M cancelled the contract with Van Wagner. Van Wagner claimed that the cancellation provision in its contract with Michaels should be interpreted to mean that Michaels could cancel the contract before she sold the building, but once sold, the buyer could not cancel the contract. Under this theory, Van Wagner brought suit for breach of contract, seeking specific performance and damages. The trial court agreed with Van Wagner’s interpretation of the contract and found in favor of Van Wagner for damages, but not specific performance. Both parties appealed and the appellate court affirmed. Van Wagner appealed.
Rule of Law
Holding and Reasoning (Kaye, J.)
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