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Why this Breach of (Unsigned) Contract Claim Would Likely Win in NY


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1/1/2016
Jonathan Cooper
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In an October 29 article, it was reported that Mississippi Scrap Recycling, LLC sued Severstal Columbus, LLC, claiming that Severstal breached their agreement whereby Mississippi agreed to provide "brokering services" to Severstal for the "purchase of aluminum for Severstal's steel production facility."

In this case, the parties' agreement, which was set to last for a period of five (5) years, was spelled out in an e-mail. Neither party to the contract ever received a fully signed copy of the agreement, however.

Nevertheless (at least according to Mississippi), based upon the parties' course of dealing with each other, it was evident that both considered the agreement to be in force. And Mississippi acted in reliance on their belief that the two sides had an agreement.

Two years into the agreement, Severstal decided to walk away, contending that the two sides did not have a valid agreement.

As noted in "When You Don't Have a Written Agreement," if the trier of fact found that Mississippi's belief that the two sides had an agreement was reasonable, and that the acts they took in reliance thereon were justified, their claim would likely succeed under New York law.




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