While it is always advisable to put all your New York business agreements in writing, there are special rules that govern whether a particular contract must be in writing.
- Sales of goods: Like most states, sales transactions are governed in New York by the Uniform Commercial Code, which has a specific section on when it is necessary for your agreement to be in writing. The section is referred to as the Statute of Frauds. The Statute of Frauds in New York states that contracts in New York for the price of $500 or more is not enforceable unless there is some writing sufficient to indicate that a contract has been made.
Please note that this doesn’t necessarily require a contract – only some writing proving there is a contract. Of course, the UCC contains conditions and further details on the issue, so consult an attorney before undertaking a commercial transaction.
- Any Contract That Takes More Than A Year To Perform: The NY General Obligations Law requires that contracts that will take the parties more than one year to perform must be in writing. This includes employment contracts. However, New York employers should note that employment with no specific terms (also known as “at will” employment) do not need to be in writing because they can be terminated at any time.
- Guaranty To Pay Another’s Debt: The NY General Obligations Law requires any guaranty to pay the debt of another to be in writing.
- Negotiating Services for Loan / Real Estate Brokerage: The NY General Obligations Law requires all real estate transactions and transactions related to loans to be in writing unless the person providing the services is a licensed real estate broker or an attorney.
- Sale / Lease of Real Estate: The NY General Obligations Law provides that all conveyances of real property and leases longer than one year in duration must be in writing.
- “It Depends”: There are many other instances where an attorney will advise you that it is the best practice to preserve your rights with a writing. Based on my experience as a litigator, I encourage all agreements to be laid out clearly in writing to make it easier down the road to prove the existence of an agreement should the need arise to go to court, mediation or arbitration.
That is why your New York business agreements should always be written and drafted by an experienced attorney.
*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com
Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.
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