Opinion
March 3, 1992
Appeal from the Supreme Court, New York County (Beatrice Shainswit, J.).
This is an action for breach of contract in which plaintiff seeks the payment of a cancellation penalty. By an agreement dated April 23, 1985, plaintiff agreed to install and maintain telecommunications equipment on the defendant's premises. The agreement required the defendant to pay $3,000 per month for a term not to exceed twenty months. The agreement further provided that it could be cancelled on thirty days notice with a penalty of $20,000, with the sum reduced by 1/20th each month. By letter agreement dated April 22, 1987, the contract was extended to December 31, 1987, with the price, terms and conditions of the contract to remain the same. By agreement dated March 17, 1988, the contract was extended to December 31, 1988, effective January 1, 1988, with the price, terms and conditions to remain the same. On June 1, 1988, the defendant gave notice terminating the agreement.
The original contract contained a cancellation penalty which was reduced by 1/20th each month. At the end of that time, the cancellation penalty was reduced to zero. No new cancellation clause or penalty was put into the extension agreements. Defendant was thus not liable for a cancellation penalty, and summary judgment dismissing the action should have been granted.
Concur — Rosenberger, J.P., Wallach, Ross and Smith, JJ.