The commercial law of New York can be found in the decisions of the New York courts interpreting contract law principles and in the statutes enacted by the New York legislature (e.g., the New York General Obligations Law). Based on a rich tradition of judicial decisions and modern legislation, New York law is recognized as a legal framework that gives parties confidence that their agreements will be honored and enforced as negotiated and written. In this way New York law achieves both predictability and stability.
Some of the important characteristics of New York law are reflected in judicial decisions:
- New York is “a financial capital of the world, serving as an international clearinghouse and marketplace for a plethora of international transactions, such as to be so recognized by our decisional law. A vast amount of international letter of credit business is customarily handled by certain New York banks whose facilities and foreign connections are particularly adaptable to this field of operation. The parties, by listing United States dollars as the form of payment, impliedly accepted these facts and set up procedures to implement their trust in our policies. In order to maintain its preeminent financial position, it is important that the justified expectations of the parties to the contract be protected.” Zeevi and Sons, Ltd. v. Grindlays Bank (Uganda) Limited, 37 N.Y. 2d 220, 227 (1975).
- “Parties who engage in transactions based on prevailing law must be able to rely on the stability of such precedents.” Holy Properties Ltd., L.P. v. Kenneth Cole Prods., 87 N.Y.2d 130, 134 (N.Y. 1995).
- New York’s highest court has emphasized that “when parties set down their agreement in a clear, complete document, their writing should be enforced according to its terms” . . . . It is the role of the courts to enforce the agreement made by the parties – not to add, excise or distort the meaning of the terms they chose to include, thereby creating a new contract under the guise of construction.” NML Capital v. Republic of Argentina, 17 N.Y.3d 250, 259-60 (N.Y. 2011).
- Contracts for the sale of goods in New York are governed by the New York Uniform Commercial Code, a statutory scheme that courts interpret “with an eye toward business realities and the predictable consequences of legal rules.” New York courts thus “reject a statutory interpretation that conflicts with reasonable business practices.” Regatos v. North Fork Bank, 5 N.Y.3d 395, 405 (N.Y. 2005).
- Since the United States is a contracting party to the UN Convention on Contracts for the International Sale of Goods (CISG), the CISG may also apply to contracts that come within its scope.