On June 15, 2023, the First Department issued a decision in Parkmerced Invs., LLC v. WeWork Cos. LLC, 2023 NY Slip Op. 03290, holding that a breach of contract claim cannot be based on a term sheet that by its terms is non-binding, explaining:
The court correctly dismissed the breach of contract claim. A term sheet that sets forth the general intent of the parties to discuss in good faith the terms and conditions of a deal and states that neither party shall be bound until the parties execute a more formal written agreement, does not constitute an enforceable contract. Here, the inception sentence of the term sheet stated that what followed was a non-binding indication of terms for a preferred equity investment in plaintiff by WeWork and nonparty GMF Capital LLC. The final provision, titled “non-binding,” reiterated that the parties understood and agreed that the term sheet was provided solely for discussion purposes and is not a commitment or agreement of any kind on the part of WeWork. . . .
The cause of action based upon breach of the covenant of good faith and fair dealing cannot be sustained absent a contractual obligation between the parties. Nor can the claim be used as a substitute for the nonviable breach of contract claim. Furthermore, plaintiff’s vague assertions that WeWork refused to negotiate in good faith were conclusory.
The promissory estoppel claim was correctly dismissed as duplicative of the breach of contract claim. Moreover, the claim was undercut by the absence of a sufficiently clear and unambiguous promise.
(Internal quotations and citations omitted).