On September 6, 2023, Justice Cohen of the New York County Commercial Division issued a decision in Daiwa Corporate Advisory LLC v. Katapult Group, Inc., 2023 NY Slip Op. 33079(U), holding that a defendant could not use the doctrine of definiteness to defeat a breach of contract claim, explaining:
[I]t is undisputed that Katapult retained a financial advisor (PJT) to pursue a Sale during the period set forth in § 4(c) without extending Daiwa the opportunity to exercise its Right of First Refusal. Katapult argues that § 4(c) gave Daiwa only the opportunity to pitch for work in connection with the Sale and leaves material terms to future negotiations and is thus an unenforceable agreement to agree. However, under New York law, all the terms contemplated by [an] agreement need not be fixed with complete and perfect certainty for a contract to have legal efficacy. The doctrine of definiteness is to be sparingly used, as a last resort, and only when an agreement cannot be rendered reasonably certain by reference to an extrinsic standard that makes its
meaning clear. In fact, where at the time of agreement the parties have manifested their intent to be bound, a price term may be sufficiently definite if the amount can be determined objectively without the need for new expressions by the parties, for example by reference to an extrinsic event, commercial practice or trade usage.Here, the Right of First Refusal is sufficiently definite to be enforceable. It set forth the types of transactions, the role Daiwa would assume, the scope ofDaiwa’s services, and a means to determine Daiwa’s compensation in accordance with commercial practice.
Katapult’s reliance on Faros Advisors LLC v Digital Globe, Inc., 333 F Supp3d 354, 360 [SDNY 2018] to suggest that § 4(c) merely provided Daiwa with an opportunity to pitch for work is unavailing. The contract in Faros required the defendant to offer plaintiff the opportunity to act as a financial advisor to defendant, whereas here the express language of § 4(c) unambiguously states that Daiwa shall have the right to act as exclusive financial advisor placement agent to Katapult with respect to a Sale. Moreover, the court in Faros distinguished Cowen (the case on which Daiwa primarily relies), where the contract specifically defined the type of transaction, type of financial advisor and also specified the means for determining the compensation for that role and found there was no such specificity in the Offer Clause, and thus no comparable standard for the Court to apply. As stated above, here, § 4(c) delineates Daiwa’s role and obligations with respect to contractually defined transaction types, and contemplates fees customary for similar transactions .Therefore, Katapult’s failure or refusal to extend Daiwa the opportunity to exercise the Right of First Refusal constitutes a breach of § 4(c) of the Letter Agreement.
(Internal quotations and citations omitted).