Collateral Oral Construction Agreements, Merger Clauses, and Alternative Quasi‑Contract Claims: Commentary on White Mgt. Corp. v. Mountain Mart 105, LLC

Collateral Oral Construction Agreements, Merger Clauses, and Alternative Quasi‑Contract: A Commentary on White Mgt. Corp. v. Mountain Mart 105, LLC

I. Introduction

The Appellate Division, Fourth Department’s decision in White Management Corp. v. Mountain Mart 105, LLC, 2025 NY Slip Op 07128 (Dec. 23, 2025), is a significant commercial contract case at the intersection of:

  • Oral construction/remodeling agreements involving leased property,
  • No‑oral‑modification clauses and General Obligations Law § 15‑301,
  • Merger (integration) clauses and the parol evidence rule, and
  • The ability to plead unjust enrichment and quantum meruit in the alternative where the existence or scope of contracts is disputed.

The dispute arises out of the redevelopment of two retail properties in Massena and Canton, New York:

  • Each property was owned by a Mountain Mart entity (the defendants),
  • Existing Dunkin’ Donuts stores operated there under earlier written leases (2003 and 2004), with the landlords bearing responsibility for repairs and replacements, and
  • Vacated restaurant space at each location was to be converted for use by KFC restaurants operated by a related plaintiff entity.

The core controversy centers on an alleged December 2020 oral “Remodel/Drive‑Through Agreement” under which:

  • Defendants allegedly agreed to:
    • Renovate vacated restaurant space for KFC, including constructing drive‑throughs and delivering a “Vanilla Box”, and
    • Pay for remodeling the existing Dunkin’ Donuts stores and common area improvements; and
  • White Management Corp. would manage the work and be reimbursed by defendants.

Subsequent written leases in June 2021 between the Mountain Mart entities and North Country Chicken Corp. (for the KFC locations) contained merger clauses declaring the leases the parties’ “entire Agreement” and superseding all prior agreements.

The plaintiffs sued for:

  • Breach of the Dunkin’ Donuts leases (1st, 2nd, 4th, 5th causes of action),
  • Breach of the oral Remodel/Drive‑Through Agreement (3rd cause of action),
  • Account stated (6th),
  • Unjust enrichment (7th, 8th), and
  • Quantum meruit (9th, 10th).

The Supreme Court (Oneida County) granted defendants’ CPLR 3211 motion to dismiss the 3rd and 6th–10th causes of action. On appeal, the Fourth Department partially reinstated key claims and, in doing so, clarified:

  • When a separate oral construction agreement will not be treated as an impermissible oral modification of an existing lease;
  • How merger clauses and the parol evidence rule extinguish pre‑existing oral agreements on the “same subject matter” — even as to non‑signatories in privity; and
  • When plaintiffs may simultaneously plead contract and quasi‑contract theories in construction/renovation disputes.

II. Summary of the Opinion

A. Procedural Posture

  • Defendants moved to dismiss under CPLR 3211(a)(1) (documentary evidence) and (a)(7) (failure to state a claim).
  • Supreme Court:
    • Dismissed the 3rd (oral agreement), 6th (account stated), and 7th–10th (unjust enrichment & quantum meruit) causes of action, and
    • Granted plaintiffs’ cross‑motion for leave to amend in part.
  • Plaintiffs appealed the dismissals.

B. Appellate Division’s Disposition

The Fourth Department unanimously modified and, as modified, affirmed the order:

  1. Third cause of action (breach of the Remodel/Drive‑Through Agreement):
    • Partially reinstated:
      • As to White Management’s claim that defendants breached the oral agreement with respect to:
        • Remodeling the Dunkin’ Donuts stores, and
        • Common area improvements.
    • Properly dismissed:
      • As asserted by the other plaintiffs (they were not parties to that oral agreement), and
      • As to the portions of the oral agreement relating to construction of the KFC drive‑throughs and delivery of “Vanilla Boxes” for KFC, because:
        • The subsequent KFC leases, containing merger clauses, superseded all prior agreements on that subject, and
        • The parol evidence rule barred enforcement of the prior oral agreement on the same subject matter, even by White Management.
  2. Sixth cause of action (account stated):
    • Dismissal affirmed.
    • Documentary evidence established an ongoing dispute as to the amount owed, defeating the “agreement on a balance due” element of an account stated.
  3. Seventh through tenth causes of action (unjust enrichment and quantum meruit):
    • Reinstated.
    • The court held that, because there is a live dispute about:
      • Whether the Remodel/Drive‑Through Agreement existed, and
      • Whether the existing leases fully covered the remodeling/construction work,
      plaintiffs are entitled to plead quasi‑contract theories in the alternative.

Additionally, the Court clarified that:

  • The supposed lack of separateness between White Management and the other plaintiff entities could not be resolved on a CPLR 3211 motion; that is a fact issue.
  • No‑oral‑modification clauses in the Dunkin’ Donuts leases and General Obligations Law § 15‑301 did not bar the oral Remodel/Drive‑Through Agreement as to Dunkin’/common area work, because it did not “modify” lease terms; it simply implemented the landlords’ existing obligations via a separate arrangement with a third‑party manager.

III. Detailed Analysis

A. Precedents and Their Influence on the Decision

1. Pleading Standards and CPLR 3211: Leon v Martinez and AG Capital Funding

The Court begins by restating the settled CPLR 3211(a)(7) standard, citing:

  • Leon v Martinez, 84 NY2d 83 (1994):
    “[W]e must accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory.”
  • AG Capital Funding Partners, L.P. v State St. Bank & Trust Co., 5 NY3d 582 (2005):
    Any deficiencies in the complaint may be amplified by supplemental pleadings and other evidence (such as affidavits).

These precedents underpin the Appellate Division’s willingness to rely on White Management’s president’s affidavit to:

  • Clarify that the Remodel/Drive‑Through Agreement was between only White Management and defendants, and
  • Reinforce that White Management alleged a distinct collateral agreement regarding Dunkin’ and common area work, not an oral modification of the leases themselves.

For CPLR 3211(a)(1), the Court quotes:

  • 511 W. 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144, 152 (2002):
    Dismissal is proper “only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law.”

This standard shapes the limited reach of the lease documents and correspondence: they bar some claims (e.g., account stated; portions of the oral agreement) but not all (e.g., Dunkin’/common area construction claims under the oral agreement).

2. Corporate Separateness as a Fact Issue: Cohen & Lombardo, P.C. v Connors

  • Cohen & Lombardo, P.C. v Connors, 169 AD3d 1399 (4th Dept 2019), is cited for the principle that:
    Whether entities are in fact separate corporate entities is an issue of fact that cannot be resolved on a motion to dismiss.

Supreme Court had effectively treated White Management and the other plaintiffs as not meaningfully distinct for purposes of the leases. The Fourth Department rejected that move at the pleading stage, preserving White Management’s ability to assert a separate contractual relationship with defendants in tort and contract — an important practice point where landlord/tenant groups operate via multiple affiliated entities.

3. No‑Oral‑Modification Clauses and GOL § 15‑301: Gerard v Cahill and Bridge St. Enters. v Pastino’s Italian Grill

Defendants argued that the Dunkin’ Donuts leases’ prohibition on oral modifications, coupled with General Obligations Law § 15‑301, barred enforcement of the Remodel/Drive‑Through Agreement. The Appellate Division rejected this argument by drawing on:

  • Gerard v Cahill, 66 AD3d 957 (2d Dept 2009): held that where a later agreement does not actually “modify” the written contract but deals with something collateral or consistent with it, the no‑oral‑modification rule does not apply.
  • By contrast, the Court distinguished: Bridge St. Enters. v Pastino’s Italian Grill, Inc., 43 AD3d 1306 (4th Dept 2007), where the later agreement functionally altered the existing contract’s terms and thus triggered the no‑oral‑modification and GOL § 15‑301 restrictions.

Applying these authorities, the Court emphasized:

  • The Dunkin’ leases already placed the obligation for repairs, replacements, and improvements on the landlord.
  • The oral Remodel/Drive‑Through Agreement did not change the scope or nature of those lease obligations; it only:
    • Allocated how the landlords would fulfill those obligations, and
    • Engaged White Management to manage and front the work, subject to reimbursement.
  • Thus, the oral agreement was collateral and not a “modification” of the leases, and GOL § 15‑301 did not bar it.

This is a key doctrinal point: a landlord may validly enter into an oral construction/management agreement with an affiliate of the tenant to implement lease‑mandated work, without that being an oral lease modification barred by a no‑oral‑modification clause or GOL § 15‑301.

4. Merger Clauses and the Parol Evidence Rule: Wilson v Dantas, Braten v Bankers Trust, Bero Contr. & Dev. Corp. v Vierhile, and Lentner v Upstate Forestry

For the KFC‑related portion of the oral agreement (drive‑throughs and Vanila Boxes for the KFC restaurants), the Court reached the opposite result: those claims were barred by later written, integrated KFC leases.

  • Wilson v Dantas, 173 AD3d 460 (1st Dept 2019), lv denied 34 NY3d 909 (2020):
    • Merger clauses stating the writing is the “entire agreement” and supersedes prior agreements are given full effect under New York law.
    • They generally preclude reliance on prior oral agreements on the same subject matter.
  • Braten v Bankers Trust Co., 60 NY2d 155 (1983):
    Evidence of oral agreements made before an integrated written instrument cannot be used to vary the writing’s terms; a collateral agreement that is “so clearly connected with the [lease] that the parties could have been expected to embody it” therein cannot be separately enforced.
  • Bero Contr. & Dev. Corp. v Vierhile, 19 AD3d 1160 (4th Dept 2005), lv dismissed, lv denied:
    • Applied parol evidence and merger principles to bar reliance on inconsistent prior oral undertakings.
  • Lentner v Upstate Forestry & Dev., LLC, 222 AD3d 1369 (4th Dept 2023):
    • Recently reaffirmed that collateral agreements “so clearly connected” to the subject matter of a fully integrated contract are unenforceable separately.

Here, the KFC leases:

  • Contained explicit merger clauses: each lease “constitutes the entire Agreement between the parties, and supersedes all prior agreements.”
  • Expressly obligated defendants to:
    • Remove existing infrastructure and
    • Deliver a “Vanilla Box” to North Country at each location.

The alleged oral promises to construct the KFC drive‑throughs and deliver Vanilla Boxes are thus “so clearly connected” to the written lease obligations that they fall squarely within Braten’s bar:

  • The subject matter (build‑out of the KFC spaces, including Vanilla Boxes) is the same.
  • The written lease is fully integrated and meant to be complete.
  • Any pre‑existing oral arrangement on that same topic is superseded and cannot be separately enforced.

5. Parol Evidence vs. Non‑Parties in Privity: Oxford Commercial Corp. v Landau

Plaintiffs attempted to escape the effect of the merger clauses and parol evidence rule by noting that White Management was not itself a signatory to the KFC leases. The Court rejected this, citing:

  • Oxford Commercial Corp. v Landau, 12 NY2d 362, 365–66 (1963):
    The protection of the parol evidence rule is not limited to the parties to the writing; it extends to others who stand in privity and whose rights are based upon or derived from the writing.

The Court observed that the complaint itself made “clear that White Management was in privity with both defendants and North Country.” This is critical:

  • Because White Management’s rights are functionally intertwined with performance of the KFC leases,
  • It cannot invoke a prior oral arrangement to vary lease terms on the same subject matter,
  • Even though it was not a lease signatory.

This extends the practical reach of the parol evidence rule and merger clauses to affiliated entities and contractors whose claims derive from the same integrated contract.

6. Account Stated: Seneca Pipe & Paving, Hull, and Newburger‑Morris

On the sixth cause of action for account stated, the Court relied on:

  • Seneca Pipe & Paving Co., Inc. v South Seneca Cent. School Dist., 83 AD3d 1540 (4th Dept 2011)
  • Hull v City of N. Tonawanda, 6 AD3d 1142 (4th Dept 2004)
  • Newburger‑Morris Co. v Talcott, 219 NY 505 (1916)

From these decisions, the Court reiterates:

“An account stated represents an agreement between the parties reflecting an amount due on a prior transaction. An essential element of an account stated is an agreement with respect to the amount of the balance due.”

The documentary submissions demonstrated that:

  • Defendants did not assent to plaintiffs’ invoices or claimed balances;
  • There was an active dispute over how much, if anything, remained owing.

The Court notes, citing AWL Indus., Inc. v New York City Hous. Auth., 237 AD3d 596 (1st Dept 2025), that plaintiffs did not contest the sufficiency of defendants’ documents as “documentary evidence” under CPLR 3211(a)(1). Those documents conclusively refuted the “agreement on the balance due” element, so dismissal was proper.

7. Quasi‑Contract in the Shadow of Disputed Written Agreements: Clark‑Fitzpatrick, Villnave, Milherst, Tutor Perini, and Beach

The reinstatement of the unjust enrichment (7th & 8th) and quantum meruit (9th & 10th) claims is anchored in a sophisticated, but now well‑settled, pleading principle.

  • Clark‑Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382 (1987):
    “The existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract for events arising out of the same subject matter.”

However, numerous Appellate Division decisions have clarified that “ordinarily” does not mean “always,” especially at the pleading stage:

  • Villnave Constr. Servs., Inc. v Crossgates Mall Gen. Co. Newco, LLC, 201 AD3d 1183 (3d Dept 2022)
  • Milherst Constr., Inc. v Natale Bldg. Corp., 218 AD3d 1310 (4th Dept 2023)
  • Tutor Perini Corp. v State of New York, 209 AD3d 692 (2d Dept 2022)
  • Beach v Touradji Capital Mgt. L.P., 85 AD3d 674 (1st Dept 2011)

These cases hold that where:

  • There is a bona fide dispute as to:
    • Whether a contract exists at all, or
    • Whether the asserted contract covers the specific work or subject matter in dispute,
  • The plaintiff may plead unjust enrichment and quantum meruit in the alternative to a breach of contract theory.

The Fourth Department applies this line of authority to the facts of White Management:

  • There is a dispute over:
    • The existence and scope of the Remodel/Drive‑Through Agreement; and
    • Whether the Dunkin’ leases and/or the KFC leases fully govern the remodeling/construction and management services at issue.
  • Because of that uncertainty, plaintiffs are entitled to pursue:
    • Contract remedies (breach of leases; breach of oral agreement), and
    • Quasi‑contract remedies (unjust enrichment; quantum meruit), in the alternative.

This is particularly important in construction and commercial fit‑out disputes, where work often proceeds under evolving understandings and partial writings.

B. The Court’s Legal Reasoning in Context

1. The Core Distinction: Dunkin’/Common Area Work vs. KFC Build‑Out Work

A central analytic move in the opinion is the Court’s bifurcation of the alleged oral agreement:

  1. Dunkin’ Donuts and common area renovation work:
    • Governed by landlord repair/improvement obligations in the Dunkin’ leases;
    • Implemented via a separate oral management/reimbursement arrangement with White Management;
    • Not inconsistent with the leases and not a lease “modification.”
  2. KFC drive‑throughs and Vanilla Box build‑outs:
    • Initially discussed orally but later expressly covered by fully integrated, written KFC leases;
    • The KFC leases have merger clauses and comprehensive Vanilla Box obligations;
    • Any earlier oral understanding is “so clearly connected” that it is deemed merged and unenforceable.

This distinction allows the Court to:

  • Preserve plaintiffs’ contract claim where the oral agreement is collateral and consistent with existing written contracts (Dunkin’/common area work); but
  • Enforce the supremacy and completeness of written, integrated agreements where the subject matter overlaps fully (KFC fit‑out work).

2. The Limited Reach of No‑Oral‑Modification Clauses and GOL § 15‑301

The Court’s reasoning on no‑oral‑modification and GOL § 15‑301 is noteworthy:

  • No‑oral‑modification clauses protect written agreements from later, informal changes in the terms.
  • GOL § 15‑301 codifies that if a written contract prohibits oral modification, any claimed oral modification is generally unenforceable, absent partial performance unequivocally referable to the modification.

But the Court emphasizes that:

  • An oral agreement that does not change the parties’ rights and obligations under the written contract — but merely provides an operational mechanism to implement them — is not a “modification” within the meaning of these rules.
  • Thus, a landlord can orally agree with a separate entity (here, White Management) to:
    • Take charge of renovation projects,
    • Front construction costs, and
    • Be reimbursed for work that the landlord was already obligated by lease to ensure occurred.

In effect, a no‑oral‑modification clause in a lease does not bar the landlord from orally contracting with third parties to carry out their lease obligations and to allocate costs for that fulfillment.

3. The Broad Reach of Integration and the Parol Evidence Rule

By contrast, the Court reads the KFC leases robustly:

  • They contain clear merger clauses, making them fully integrated.
  • They expressly allocate responsibility for the exact work at issue (Vanilla Boxes, site preparation).

Under Braten, Wilson, and Bero, any prior oral promises between the same (or privy) parties on that subject matter are merged into the written contracts and are inadmissible both:

  • To vary the contract’s meaning, and
  • As independent, separately enforceable collateral contracts.

The inclusion of White Management within the scope of the parol evidence bar, via Oxford Commercial, is doctrinally important:

  • Even if White Management did not sign the KFC leases,
  • Its rights are functionally based on those leases and defendants’ performance of them,
  • Therefore, it is treated as a party in privity subject to the same evidentiary and substantive limitations (parol evidence; merger clause) as the actual signatories.

4. Alternative Pleading and Quasi‑Contract Safety Nets

The Court’s reinstatement of unjust enrichment and quantum meruit claims implements a now‑settled but still critical pleading doctrine in New York practice:

  • Where contract formation, validity, or scope is undisputed, plaintiffs usually cannot seek quasi‑contract recovery for the same subject matter.
  • Where — as here — there is a genuine dispute about:
    • Whether a contract arose (e.g., the oral agreement), or
    • Whether the contract covers particular work or services,
    plaintiffs may plead quasi‑contract in the alternative.

The Fourth Department reads Villnave, Milherst, Tutor Perini, and Beach to allow these claims to survive the pleading stage so long as:

  • Defendants themselves put the existence or scope of contractual arrangements at issue, or
  • The documents do not conclusively establish that a particular category of work is governed by an enforceable contract.

That is precisely the situation regarding:

  • The existence and scope of the oral Remodel/Drive‑Through Agreement, and
  • The relationship between that oral agreement and the written leases.

IV. Complex Concepts Simplified

1. “Vanilla Box”

Commercial leasing practice frequently uses “Vanilla Box” (or “white box”) to describe a basic, neutral, ready‑to‑fit‑out retail space. Typically, a “Vanilla Box” includes:

  • Finished walls and ceilings,
  • Flooring in rough or basic condition,
  • Basic HVAC, electrical, and plumbing stubs, and
  • A space otherwise ready for the tenant’s final build‑out and branding.

In this case, Mountain Mart was obligated under the KFC leases to deliver such a Vanilla Box to North Country. The dispute is partly about how the pre‑lease oral commitments surrounding this build‑out relate to the final written leases.

2. Merger (Integration) Clause

A merger clause states that the written contract:

  • Is the parties’ complete and final agreement, and
  • Supersedes all prior negotiations, promises, or agreements (oral or written) on the same subject.

Once a merger clause is present and enforceable:

  • Parties generally cannot claim that some earlier oral promise changed or supplemented the contract, and
  • Courts will not allow evidence of those promises to contradict or “add to” the contract’s written terms.

3. Parol Evidence Rule

The parol evidence rule is an evidentiary and substantive rule that:

  • Bars the use of prior or contemporaneous oral (and certain written) statements to vary or contradict the unambiguous terms of a fully integrated written contract.
  • Permits such evidence only in limited situations (e.g., to explain ambiguous terms, show fraud, mistake, or lack of capacity).

In White Management:

  • The KFC leases were integrated; therefore:
    • Plaintiffs cannot rely on earlier oral agreements regarding KFC build‑out to change or supplement those leases.
  • The Dunkin’ leases, however, were not deemed to have been modified by the oral agreement; the oral agreement simply implemented existing obligations, so it was not barred.

4. No‑Oral‑Modification Clauses & General Obligations Law § 15‑301

A no‑oral‑modification clause provides that:

  • The contract cannot be modified except in a signed writing.

GOL § 15‑301 backs this up by making oral modifications unenforceable where such a clause exists, with narrow exceptions (like partial performance “unequivocally referable” to the modification).

Key nuance from this case:

  • An implementation agreement (e.g., an oral agreement with a contractor/manager to carry out work that the contract already requires) is not itself a “modification” of the contract.
  • Therefore, no‑oral‑modification clauses do not sweep that kind of collateral arrangement within GOL § 15‑301’s bar.

5. Account Stated

An account stated is not the same as a simple unpaid invoice. It requires:

  • An existing debtor–creditor relationship (e.g., prior transactions), and
  • An agreement — express or implied — on the correctness of a final balance due.
    • Implied agreement can arise if a party receives a statement of account and keeps it without objection for a reasonable time.

If there is clear evidence that the alleged debtor disputed the amount billed, or sent timely objections, an account stated theory fails.

6. Unjust Enrichment and Quantum Meruit (Quasi‑Contract)

Unjust enrichment occurs when:

  • One party benefits at another’s expense, and
  • Equity and good conscience require restitution.

Quantum meruit is related, but more focused on:

  • Services provided,
  • Accepted or used by the defendant, and
  • Reasonable value of such services.

Both are forms of quasi‑contract — legal tools courts use to impose obligations where no enforceable contract exists (or where a contract does not cover the particular benefit at issue), to prevent unjust results.

In New York:

  • If a valid, undisputed written contract governs the same subject matter, quasi‑contract is generally unavailable (Clark‑Fitzpatrick).
  • If the existence or scope of the contract is contested, quasi‑contract remedies may be pursued at least as alternative theories at the pleading stage.

7. Privity

Privity describes a sufficiently close legal relationship between parties (or entities) such that:

  • One’s rights and obligations are legally tied to the contract of another, or
  • One can enforce (or be bound by) contractual rights derived from another’s contract.

Here, White Management, though not a signatory to the KFC leases, was treated as being in privity with defendants and North Country for purposes of the parol evidence rule. As a result, it could not evade the leases’ merger clauses by claiming reliance on prior oral promises on the same subject matter.

V. Impact and Broader Significance

1. For Commercial Landlords and Tenants

  • Oral project management agreements remain viable.
    • Landlords may orally engage affiliated tenant entities or third parties to perform and manage lease‑required work, without automatically violating no‑oral‑modification clauses, so long as:
      • The oral agreement does not change the substance of the parties’ lease rights and obligations, and
      • It is merely a mechanism to carry out existing obligations.
  • But integration clauses regarding build‑outs are powerful.
    • When negotiating final leases that address build‑out or Vanilla Box obligations, parties should assume earlier oral “understandings” on those points are merged and will not be enforceable separately.

2. For Construction Managers and Affiliated Service Entities

  • Affiliates cannot rely on “non‑party” status to escape merger clauses and parol evidence rules.
    • Where an affiliate’s services or payment claims are inextricably tied to a fully integrated lease, the affiliate will likely be treated as in privity and bound by the lease’s integration and parol evidence framework.
  • Written side agreements remain prudent.
    • To avoid disputes over scope and payment, entities like White Management should formalize their role and reimbursement rights in a separate written contract or in an addendum explicitly referenced in the primary leases.

3. For Litigators: Pleading Strategy

  • Hybrid contract/quasi‑contract pleading is affirmed.
    • Where the existence, validity, or scope of a contract is disputed, practitioners are again reminded that:
      • Unjust enrichment and quantum meruit should be pled in the alternative at the outset, and
      • Courts will generally allow those claims to survive a CPLR 3211 motion.
  • Account stated remains narrow.
    • If the client’s invoices were disputed in writing or by conduct, an account stated theory is vulnerable on a documentary evidence motion. Practitioners should be cautious in relying on this cause of action in active construction disputes.

4. Doctrinal Clarifications

  • Boundary between lease “modifications” and collateral implementation agreements.
    • White Management underscores that courts will look to the substance of an oral agreement:
      • If it changes who owes what under the lease, it may be a prohibited modification.
      • If it simply changes how an existing obligation is carried out (e.g., by whom and under what reimbursement terms), it may stand as a separate contract.
  • Extension of parol evidence rule to affiliated, privy entities.
    • The opinion confirms that entities closely tied to lease performance cannot circumvent integration clauses by invoking pre‑lease oral agreements that mirror lease obligations.

VI. Conclusion

White Mgt. Corp. v. Mountain Mart 105, LLC is a nuanced, fact‑driven decision that refines several important points in New York commercial contract law:

  • It distinguishes between:
    • Oral agreements that impermissibly modify written leases, and
    • Collateral, implementational agreements that merely operationalize existing lease obligations and are therefore not barred by no‑oral‑modification clauses or GOL § 15‑301.
  • It reaffirms the powerful effect of merger clauses and the parol evidence rule:
    • Prior oral agreements on the same subject as integrated leases are merged and cannot be independently enforced, even by closely related non‑signatories in privity.
  • It confirms that where contractual existence or scope is genuinely disputed, plaintiffs may plead unjust enrichment and quantum meruit in the alternative, despite the general rule against quasi‑contract recovery in the presence of a written contract.
  • It narrows the availability of an account stated theory in active construction billing disputes, where documentation evidences ongoing disagreement over amounts due.

Going forward, landlords, tenants, and construction managers should:

  • Recognize that oral implementation agreements can be enforceable if carefully structured as collateral to — not modifications of — existing leases;
  • Expect that comprehensive build‑out obligations in integrated leases will subsume prior negotiations and oral promises; and
  • Use written side agreements whenever practical to avoid disputes like those that led to this litigation.

As a precedent, White Management will serve as an important reference point for New York courts analyzing:

  • Construction/fit‑out disputes involving multiple affiliated parties,
  • The boundaries of oral modification doctrine and collateral agreements, and
  • The procedural viability of quasi‑contract as an alternative to breach of contract claims.

Case Details

Year: 2025
Court: Appellate Division of the Supreme Court, New York

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