My March 2023 column flagged an important decision by the New York County Supreme Court that bucked the general principle that damages from the breach of a preliminary “agreement to agree” are limited to out-of-pocket costs.

That case, Cresco Labs New York v. Fiorello Pharms., 178 N.Y.S.3d 425 (N.Y. Sup. Ct. 2022), involved the breach of an agreement to negotiate in good faith toward a cannabis license deal. The agreement had a confidentiality clause and a “no shop” provision that required the parties to negotiate exclusively with each other for the 30-day term. The court found that one party breached the preliminary agreement within “a nanosecond” by soliciting other bidders and slow-walking the negotiations to run out the 30-day exclusivity period.