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. The following is the basics of the New York’s Statute of Frauds
- 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 formal long-form contract – only some writing proving there is a contract. Of course, the UCC contains conditions and further details on the issue, so consult a New York lawyer before undertaking a commercial transaction.
- Any Contract that may 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 NY real estate transactions and transactions related to loans in New York to be in writing unless the person providing the services is a licensed real estate broker or a New York attorney.
- Sale / Lease of Real Estate
The NY General Obligations Law provides that all conveyances of real property and leases in New York longer than one year in duration must be in writing.
- “It Depends”
There are many other instances where an attorney in New York shall advise you that it is the best practice to preserve your rights with a writing. Based on our experience, we 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.