On April 23, 2026, Justice Boddie of the Kings County Commercial Division issued a decision in Big City Outdoor, LLC v. JTRE 23 WS LLC, 2026 NY Slip Op. 50579(U), reforming a contract on summary judgment based on the parties’ course of performance and the avoidance of absurd results, explaining:
Defendants argue that the use of “Lessee” in the 2017 Agreement is merely a scrivener’s or typographical error and that, consistent with the 2013 and 2014 agreements and the nature of typical window advertising arrangements, the provision was intended to refer to the “Lessor.” Plaintiff, by contrast, insists that the 2017 language was deliberate and must be enforced according to its plain terms.
The general rule of contract interpretation is that ambiguities in an agreement should be interpreted most strongly against the draftsman. However, where a particular interpretation would lead to an absurd result, the courts can reject such a construction in favor of one which would better accord with the reasonable expectations of the parties. It is likewise well settled that a contract should not be interpreted to produce a result that is absurd, commercially unreasonable or contrary to the reasonable expectations of the parties.
Here, plaintiff’s interpretation would produce an absurd and commercially unreasonable result. The parties’ Agreement consists of plaintiff’s limited right to place advertising on certain windows, while defendant retained ownership and control of the underlying commercial premises. It makes commercial sense that the landlord would retain the right to terminate a limited signage arrangement upon the lease or sale of the premises. It is commercially unreasonable that the tenant, whose interest was confined to use of the windows for advertising, would instead hold the operative right to terminate the lease in that circumstance. Such a reading would effectively deprive the owner of control over its own premises in the very event when that control matters most, i.e. the leasing or sale of the premises. That construction is not only inconsistent with ordinary commercial expectations, but is flatly inconsistent with the parties’ 2013 and 2014 agreements, which expressly vested that right in the landlord.
A claim for reformation of a written agreement must be grounded upon either mutual mistake or fraudulently induced unilateral mistake, and to succeed, the party seeking relief must establish by clear, positive and convincing evidence that the agreement does not accurately express the parties’ intentions. Reformation based upon a scrivener’s error requires proof of a prior agreement between the parties, which when subsequently reduced to writing fails to accurately reflect the prior agreement. The parties’ course of performance under the contract, or their practical interpretation of a contract for any considerable period of time, is the most persuasive evidence of the agreed intention of the parties.
Here, defendants have established by clear, positive, and convincing evidence their entitlement to reformation of the Agreement as a matter of law. The prior 2013 and 2014 agreements uniformly provided that the landlord had the right to terminate if the underlying space was leased or sold. The 2017 Agreement involves the exact same parties and the same general arrangement, yet contains the single anomalous substitution of “Lessee” for “Lessor.” Read in light of the prior agreements and the commercial context, that substitution is plainly a drafting error. The documentary record thus demonstrates that the 2017 Agreement, as written, does not accurately reflect the parties’ actual intent.
Accordingly, the branch of defendants’ motion seeking reformation of the 2017 Agreement is granted, and the Agreement is reformed to substitute “Lessor” for “Lessee” in the subject termination provision.
(Internal quotations and citations omitted).