A procedural device known as a “confession of
judgment” has long been an important tool in New York
state. Section 3218 of New York’s Civil Practice Law
and Rules (known as the CPLR) allows a party to sign an affidavit
confessing that he or she owes the other party an amount certain,
and authorizing the beneficiary party to file the affidavit with a
New York state county clerk in order to obtain a judgment against
the authorizing party in that amount.
Confessions of judgment are often used in conjunction with
settlement agreements or as part of transactional documents in New
York. For example, one party might sign a confession of
judgment to be held in escrow pending that party’s
fulfillment of its obligations under the settlement agreement or
transactional documents. If the party fails to fulfill its
obligations – e.g., by failing to pay the amount owed to the
other party – then the confession of judgment is released
from escrow and can be filed with the court.
