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 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 kept the guarantee “embod[ied] a binding agreement not the same as the fresh offer to supply roof materials,” brand new infraction at which triggered the statute regarding constraints anew (id. on 610). This is thus since accused into the Bulova Check out “didn’t only guarantee the position or abilities of one’s goods, however, agreed to manage an assistance” (id. within 612). That service is the fresh new separate and distinct guarantee to repair an effective faulty rooftop-a significant element of brand new parties’ contract and you can “a separate, independent and additional bonus to find” the fresh defendant’s unit (id. in the 611). Correctly, this new “preparations thinking about properties . . . was subject to a six-year law . . . running ages occasioned when a violation of your responsibility to repair the brand new fused roof taken place” (id.).
DBSP’s remove or repurchase duty is the fresh new Trust’s remedy for good infraction ones representations and warranties, not a pledge of one’s loans’ coming efficiency
The fresh new corrective condition into the Bulova Observe expressly secured upcoming abilities out-of the brand new roof and undertook a vow to fix the new rooftop in the event that it didn’t satisfy the seller’s verify. They [*7] depicted and warranted certain facts about the fresh loans’ functions since , in the event that MLPA and you will PSA was indeed carried out, and you may explicitly reported that the individuals representations and you can warranties didn’t survive the latest closure time. Unlike the new separate be sure from inside the Bulova Watch, DBSP’s dump otherwise repurchase responsibility could not fairly be viewed given that a definite promise away from coming results. It actually was dependent on, and even by-product away from, DBSP’s representations and you will payday loans Butler warranties, and that didn’t survive the brand new closing and you may were broken, if at all, thereon big date. [FN3]
In fact, little from the contract specified that dump otherwise repurchase responsibility would last for living of funds
And it makes sense that DBSP, as sponsor and seller, would not guarantee future performance of the mortgage loans, which 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 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