On August 25, 2022, Justice Ruchelsman of the Kings County Commercial Division issued a decision in Alsaidi v. Alsaede, 2022 NY Slip Op. 32927(U), dismissing a counterclaim for additional consideration due under an agreement based on the agreement’s merger clause, explaining:
It is well settled that a merger clause which states the agreement represents the entire understanding between the parties is to require full application of the parole evidence rule in order to bar the introduction of extrinsic evidence to vary or contradict the terms of the writing. . . .
The first two counterclaims assert, essentially, that the plaintiff promised to give the defendant property in Sana, Yemen in exchange for the plaintiff’s 33% share of the company and that the other members relied upon that promise. However, if true, that promise is not contained within the agreement itself and cannot, therefore, be considered. While that promise does not c:ontradict, any of the provisions of the operating agreement, c:ontradiction is not the governing test whether such oral agreements can change any of the terms of :the written agreement. Rather, parole evidence cannot be used to modify or vary the terms of a written agreement that contains a merger clause. Indeed, Article VI(A) of the operating agreement states that the Members have contributed to the Company in exchange for their membership interests, their cash interest and other property as set forth on Schedule A, annexed hereto. However, the operating agreement does not contain a Schedule A outlining the contributions of any patty. There is a schedule C called Mountains of Saber LLC Member Information which merely lists the names, addresses and percentages of ownership of each owner, including the plaintiff, but does not delineate any contribution amount at all. Thus, any promise regarding specific property located in a foreign country is surely a matter not contained in the original operating agreement and cannot cause any changes to the agreement. Moreover, there is no ambiguity regarding the agreement that might permit oral modifications.
(Internal quotations and citations omitted).