On April 20, 2022, the Second Department issued a decision in Klein v. Signature Bank, Inc., 2022 NY Slip Op. 02536, holding that a merger clause defeated an argument based on the parties’ course of conduct, explaining:
The plaintiffs contend that the prior course of dealing between the plaintiffs and the bank created an implied obligation for the bank to obtain verification or authorization from Klein prior to depositing or cashing certain checks written on his accounts or the account of JK Holdings. However, the business account agreement governing the account of JK Holdings provided that it could not be explained or supplemented by any prior or contemporaneous course of dealing between the parties, that any prior course of dealing would not constitute an implied waiver of the bank’s rights, and that none of the bank’s rights could be waived orally. The business account agreement also contained a merger clause that provided that the written agreement sets forth the entire agreement and understanding of the plaintiffs and the Bank, that all prior or contemporaneous agreements and understandings are deemed to be merged into and included in the Agreement, and that neither party is relying on any promise, agreement or understanding not set forth in the Agreement. Contrary to the plaintiffs’ contention, the provision of the business account agreement that prohibits any implied waivers of the bank’s rights is unambiguous. Based on the unambiguous terms of the business account agreement, to allow parol evidence regarding an alleged course of conduct to supplement the agreement would improperly negate the merger clause.
(Internal quotations and citations omitted).