A midtown Manhattan Daffy’s discount clothing store can stay open even though it failed to give its landlord notice before a contractual deadline that it would renew its lease, a unanimous state appeals panel has ruled.

The Appellate Division, First Department, ruled yesterday in 135 East 57th Street v. Daffy’s Inc., 101857/10, that it would be unfair to hold Daffy’s to the letter of the contract. The ruling affirmed an October 2010 decision by then-Manhattan Supreme Court Justice James A. Yates.

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