Even when the parties to a contract do not reside in New York state, in some instances they may be able to bring a New York breach of contract lawsuit. Recently, pop music star Lady Gaga and her management company, Universal Music Group, were sued for breach of contract in New York by the makers of the Bratz line of dolls, MGA Entertainment, Inc. Both companies are headquartered in California. MGA alleges that Lady Gaga and Universal Music Group breached their agreement by failing to issue the final approval of the dolls in time for them to be ready for sale during the fall 2012 retail season.
To bring a breach of New York contract claim within the state, the plaintiff must show that the defendant transacts business in New York. If Lady Gaga is not a resident of the state, MGA would therefore need to demonstrate one or more of the following factors:
- That Lady Gaga has an ongoing contractual relationship with a New York corporation.
- That the contract between Lady Gaga and MGA was negotiated or executed in New York.
- That Lady Gaga met with MGA in New York regarding the relationship between the parties.
- That the contract between MGA and Lady Gaga contains a choice-of-law clause that cites New York.
Each of the factors is important; however, none is decisive in and of itself. The court will look at the “totality of the circumstances” when deciding whether it has proper jurisdiction to hear the dispute. This includes actions taken subsequent to the execution of the contract.
To learn more about bringing a breach of contract claim in New York, contact a New York breach of contract lawyer today. Call our office at (888) 497-3410 for a free consultation.