Appellate Practice Attorney serving New York, NY
Non-personal services contracts are generally freely assignable, unless they expressly provide otherwiswe. Moreover, you don't indicate what the form of merger was (I understand that you probably don't know), i.e. whether C acquired B's stock, or just bought B's assets. If the former, there was no assignment in the first place; Company C owns Company B. Bottom line is that unless the contract is for personal services, which it doesn't seem to be, or expressly provides that it can't be assigned, it is as valid in Company C's hands as it was in Company B's.
However, that doesn't mean that it is valid. Automatic renewal clauses are looked at with some disfavor in New York and are not always enforced, especially when they are in contracts of adhesion, i.e. contracts which are not separately negotiated between parties of relatively equal bargaining power but are rather form contracts imposed by one party with superior bargaining power against the other, for example car rental agreements. Indeed, New York has a statute, NY General Obligations Law Section 5-903, which makes such automatic renewals unenforceable in contracts for service, maintenance or repairs of eal or personal property.
Answered on Dec 05th, 2013 at 12:35 PM