Should your New York business agreement always be in writing? In general, the answer to this question is “yes.” However, there are specific rules to inform us when a type of contract must be in the written form. Read on to learn about when New York contracts are required to be in writing.
The New York Statute of Frauds
The law that requires certain New York contracts to be in writing to be enforceable is referred to as “The Statute of Frauds.”
There are several types of contracts that must be in writing, including the following:
- Any Contract that May Take More than a Year to Perform: Under the New York General Obligations Law, contracts that will take the parties more than one year to perform must be in writing. This does include employment contracts, but employment with no specific terms, (which is also known as “at will” employment) is not required to be in writing since this type of employment can be terminated at any time.
- The Sale or Lease of Real Estate: Under the New York General Obligations Law, any sale of real property and lease in New York that lasting longer that one year in duration must be in writing.
- Negotiating Services for Loan/ Real Estate Brokerage: All New York real estate transactions and transactions related to loans in New York must be in writing unless the individual providing the services is a licensed real estate broker or a New York attorney, per the New York General Obligations Law.
- Sale of Goods Contracts: The Statue of Frauds in New York requires all contracts in New York for the price of $500 or more to be in writing in order for the contract to be enforceable, unless there is some writing sufficient to indicate that a contract was made. To meet this requirement, there doesn’t need to be a formal long-form contract; there only needs to be some sort of writing necessary to show that there is a contract.
- Guaranty to Pay the Debts of Another: Under the New York General Obligations Law, any contract that assumes responsibility for the financial obligations of another individual or entity must be in writing.
“Promissory Estoppel” Exception
New York recognizes an exception to the writing requirement for contracts called “promissory estoppel.” Promissory estoppel will apply if the party trying to enforce an oral agreement can show all of the following elements:
- A clear and unambiguous promise
- Reasonable and foreseeable reliance
- An injury (the party must act in reliance on the promise)
Even when all of the elements for promissory estoppel are present, it will only allow an individual to avoid the writing requirement of the contract under certain conditions. This is when the failure to enforce the promise would be unconscionable, not merely unfair or unjust. Obviously, this can be a high bar to meet.
Get Legal Help with Enforcing or Drafting your New York Contract
While the law requires only certain types of contracts must be written, in any type of business contract, you should get your contracts in writing. If you need help with drafting a contract or enforcing an oral agreement, getting in touch with a skilled legal professional is the way to go. Contact us here at MOWK Law where an experienced attorney can work on your behalf to ensure that your interests are protected.