Although parties may contractually agree to undertake a separate obligation, the breach of which does not arise until some future date, the repurchase obligation undertaken by DBSP does not fit this description. To support its contrary position, the Trust relies on our decision in Bulova Watch Co. v <**25>Celotex Corp. (46 NY2d 606 ), where we considered whether the separate repair clause in a contract for the sale of a roof constituted a future promise of performance, the breach of which created a cause of action. The separate clause the seller included in that contract was a “20-Year Guaranty Bond,” which “expressly guaranteed that [the seller] would ‘at its own expense make any repairs . . . that may become necessary to maintain said Roof’ ” (id. at 608-609).
We held that the make certain “embod[ied] a binding agreement different from brand new offer to provide roofing system materials,” the latest violation from which caused the statute regarding limitations anew (id. at 610). It was therefore once the offender for the Bulova Check out “did not only make sure the status otherwise performance of one’s products, however, wanted to do an assistance” (id. in the 612). You to services are new separate and type of vow to fix a defective roof-a serious element of the fresh new parties’ offer and you will “an alternate, independent and extra bonus to invest in” the new defendant’s product (id. in the 611). Consequently, the fresh new “plans thinking about attributes . . . was at the mercy of a six-season statute . . . powering ages occasioned each time a breach of your duty so you’re able to fix the fresh bonded roof occurred” (id.).
DBSP’s eradicate otherwise repurchase obligation is brand new Trust’s treatment for an effective violation of these representations and you will guarantees, perhaps not a guarantee of the loans’ coming abilities
This new corrective term within the Bulova Check out expressly secured coming results regarding the new roof and you can undertook a vow to repair the roof in the event that they failed to fulfill the seller’s make certain. They [*7] illustrated and you may justified specific facts about brand new loans’ functions at the time of , if MLPA and you will PSA were carried out, and you will expressly reported that people representations and you can guarantees don’t endure the brand new closing day. As opposed to the latest separate verify from inside the Bulova View, DBSP’s cure or repurchase responsibility couldn’t fairly be regarded as due to the fact a distinct hope away from have a peek at the web-site coming efficiency. It was determined by, and indeed by-product away from, DBSP’s representations and you will warranties, which did not endure the new closing and was breached, if, on that go out. [FN3]
In fact, nothing regarding the deal specified that the clean out or repurchase obligation carry out continue for the life of fund
And it makes sense that DBSP, as sponsor and seller, would not guarantee future performance of the mortgage loans, which <**25>might default 10 or 20 years after issuance for reasons entirely unrelated to the sponsor’s representations and warranties. The sponsor merely warrants certain characteristics of the loans, and promises that if those warranties and representations are materially false, it will cure or repurchase the non-conforming loans within the same statutory period in which remedies for breach of contract (i.e., rescission and expectation damages) could have been sought. [FN4]
If the cure or repurchase obligation did not exist, the Trust’s only recourse would have been to bring an action against DBSP for breach of the representations and warranties. That action could only have been brought within six years of the date of contract execution. The cure or repurchase obligation is an alternative remedy, or recourse, for the Trust, but the underlying act the Trust complains of is the same: the quality of the loans and their conformity with the representations and warranties. The Trust argues, in effect, that the cure or repurchase <**25>obligation transformed a standard breach of contract remedy, i.e. damages, into one that lasted for the life of the investment-decades past the statutory period. But nothing in the parties’ agreement evidences such an intent. Historically, we have been