Is this deal enforceable without a signed writing in New York?
GOL § 5-701(a) makes an agreement, promise or undertaking VOID unless it or some note or memorandum of it is in writing and subscribed by the party to be charged (or his lawful agent) where, among others, by its terms it is not to be performed within one year from the making or cannot be completed before the end of a lifetime; it is a special promise to answer for another's debt or default; or, under § 5-701(a)(10), it is a contract to pay compensation for services rendered in negotiating a loan, or in negotiating the purchase, sale, exchange, renting or leasing of real estate or of a business opportunity or business, its good will, inventory, fixtures or an interest therein: 'negotiating' including procuring an introduction to a party or assisting in the negotiation or consummation of the transaction, and reaching contracts implied in fact or in law, but not contracts with an auctioneer, an attorney at law, or a licensed real estate broker or salesperson. Real property has its own section: § 5-703(2) voids an unwritten contract for the sale of real property or a lease longer than one year, and § 5-703(4) preserves the power of courts of equity to compel specific performance in cases of part performance. Two more limbs of § 5-703 bear on real-property drafting: an estate or interest in real property, or a trust or power over it, cannot be created, granted, assigned, surrendered or declared except by act or operation of law or by a signed deed or conveyance in writing (§ 5-703(1)): a subdivision that by its own terms does not affect a testator's power to dispose of real property by will, nor prevent a trust from arising or being extinguished by implication or operation of law, nor prevent a declaration of trust from being proved by a writing subscribed by the person declaring it, and a contract to devise real property or to establish a trust of it is void without a signed writing (§ 5-703(3)).
The trap
New York's finder's-fee subdivision is the one that surprises out-of-state counsel: the unwritten finder's or business-broker's fee arrangement is unenforceable even where the intermediary merely made an introduction, even on a quantum meruit or implied-in-law theory, and Freedman applied it to an intermediary claiming a role in procuring for a contractor a contract to build a chemical plant in Saudi Arabia. The one-year prong is narrower than it looks. It bars only agreements that BY THEIR TERMS cannot be performed within a year, not agreements that merely take longer in practice: in Freedman subdivision 1 did NOT bar the claim, the agreement being by its terms performable within a year even though in fact the intermediary's own performance took over three years and another six passed before the plant was built, while subdivision 10 did bar it. A sale of goods is a different statute of frauds again: UCC § 2-201, which is not reproduced here; § 5-701(a)(6) opens 'Notwithstanding section 2-201 of the uniform commercial code' and does no more than make an auctioneer's sale book equivalent to a subscribed note. And § 5-701(b) carves qualified financial contracts out of the one-year prong entirely, with its own evidence rules for electronic communications and unobjected-to confirmations. The insurance-assignment paragraph, § 5-701(a)(9) (a contract to assign or an assignment of a life or health or accident insurance policy, or a promise to name a beneficiary of one) has its own exception: “This provision shall not apply to a policy of industrial life or health or accident insurance.”
15 authorities
- statuteN.Y. GOB Law § 5-701enactment date not established
The words that state the rule
a. Every agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or by his lawful agent, if such agreement, promise or undertaking: 1. By its terms is not to be performed within one year from the making thereof or the performance of which is not to be completed before the end of a lifetime; 2. Is a special promise to answer for the debt, default or miscarriage of another person;
- statuteN.Y. GOB Law § 5-701enactment date not established
The words that state the rule
6. Notwithstanding section 2-201 of the uniform commercial code, if the goods be sold at public auction, and the auctioneer at the time of the sale, enters in a sale book, a memorandum specifying the nature and price of the property sold, the terms of the sale, the name of the purchaser, and the name of the person on whose account the sale was made, such memorandum is equivalent in effect to a note of the contract or sale, subscribed by the party to be charged therewith;
- statuteN.Y. GOB Law § 5-701enactment date not established
The words that state the rule
10. Is a contract to pay compensation for services rendered in negotiating a loan, or in negotiating the purchase, sale, exchange, renting or leasing of any real estate or interest therein, or of a business opportunity, business, its good will, inventory, fixtures or an interest therein, including a majority of the voting stock interest in a corporation and including the creating of a partnership interest. "Negotiating" includes procuring an introduction to a party to the transaction or assisting in the negotiation or consummation of the transaction. This provision shall apply to a contract implied in fact or in law to pay reasonable compensation but shall not apply to a contract to pay compensation to an auctioneer, an attorney at law, or a duly licensed real estate broker or real estate salesman.
- statuteN.Y. GOB Law § 5-703enactment date not established
The words that state the rule
2. A contract for the leasing for a longer period than one year, or for the sale, of any real property, or an interest therein, is void unless the contract or some note or memorandum thereof, expressing the consideration, is in writing, subscribed by the party to be charged, or by his lawful agent thereunto authorized by writing.
- statuteN.Y. GOB Law § 5-703enactment date not established
The words that state the rule
4. Nothing contained in this section abridges the powers of courts of equity to compel the specific performance of agreements in cases of part performance.
The words that state the rule
The alleged agreement, therefore, was for services rendered in negotiating a "business opportunity”, and, in the absence of a writing, so easily obtained in a proper case, is unenforceable. Defendant is entitled to summary judgment. Accordingly, the order of the Appellate Division should be affirmed, with costs, and the complaint stand dismissed.
The words that state the rule
Plaintiff’s claim arises out of his asserted role, varyingly described, in procuring for defendant a contract to build a chemical plant in Saudi Arabia.
The words that state the rule
Subdivision 1 of the statute does not bar the claim because the alleged agreement was "By its terms”, even if not as a practical matter, performable within a year.
The words that state the rule
It matters not, however, that it was unlikely or improbable that a $41 million plant would be constructed within one year. The critical test, instead, is whether "by its terms” the agreement is not to be performed within a year. (North Shore Bottling Co. v Schmidt & Sons, 22 NY2d 171, 175-176 ; Nat Nal Serv. Stas, v Wolf, 304 NY 332, 335 .) Since neither party has contended that the alleged agreement contained any provision which directly or indirectly regulated the time for performance, the agreement is not within the bar of subdivision 1.
- statuteN.Y. GOB Law § 5-701enactment date not established
The words that state the rule
9. Is a contract to assign or an assignment, with or without consideration to the promisor, of a life or health or accident insurance policy, or a promise, with or without consideration to the promisor, to name a beneficiary of any such policy. This provision shall not apply to a policy of industrial life or health or accident insurance.
- statuteN.Y. GOB Law § 5-701enactment date not established
The words that state the rule
b. Notwithstanding paragraph one of subdivision a of this section: 1. An agreement, promise, undertaking or contract, which is valid in other respects and is otherwise enforceable, is not void for lack of a note, memorandum or other writing and is enforceable by way of action or defense provided that such agreement, promise, undertaking or contract is a qualified financial contract as defined in paragraph two of this subdivision and (a) there is, as provided in paragraph three of this subdivision, sufficient evidence to indicate that a contract has been made, or (b) the parties thereto, by means of a prior or subsequent written contract, have agreed to be bound by the terms of such qualified financial contract from the time they reach agreement (by telephone, by exchange of electronic messages, or otherwise) on those terms.
- statuteN.Y. GOB Law § 5-701enactment date not established
The words that state the rule
3. There is sufficient evidence that a contract has been made if: (a) There is evidence of electronic communication (including, without limitation, the recording of a telephone call or the tangible written text produced by computer retrieval), admissible in evidence under the laws of this state, sufficient to indicate that in such communication a contract was made between the parties; (b) A confirmation in writing sufficient to indicate that a contract has been made between the parties and sufficient against the sender is received by the party against whom enforcement is sought no later than the fifth business day after such contract is made (or such other period of time as the parties may agree in writing) and the sender does not receive, on or before the third business day after such receipt (or such other period of time as the parties may agree in writing), written objection to a material term of the confirmation;
- statuteN.Y. GOB Law § 5-701enactment date not established
The words that state the rule
4. For purposes of this subdivision, the tangible written text produced by telex, telefacsimile, computer retrieval or other process by which electronic signals are transmitted by telephone or otherwise shall constitute a writing and any symbol executed or adopted by a party with the present intention to authenticate a writing shall constitute a signing. The confirmation and notice of objection referred to in subparagraph (b) of paragraph three of this subdivision may be communicated by means of telex, telefacsimile, computer or other similar process by which electronic signals are transmitted by telephone or otherwise, provided that a party claiming to have communicated in such a manner shall, unless the parties have otherwise agreed in writing, have the burden of establishing actual or constructive receipt by the other party as set forth in subparagraph (b) of paragraph three of this subdivision.
- statuteN.Y. GOB Law § 5-703enactment date not established
The words that state the rule
1. An estate or interest in real property, other than a lease for a term not exceeding one year, or any trust or power, over or concerning real property, or in any manner relating thereto, cannot be created, granted, assigned, surrendered or declared, unless by act or operation of law, or by a deed or conveyance in writing, subscribed by the person creating, granting, assigning, surrendering or declaring the same, or by his lawful agent, thereunto authorized by writing. But this subdivision does not affect the power of a testator in the disposition of his real property by will; nor prevent any trust from arising or being extinguished by implication or operation of law, nor any declaration of trust from being proved by a writing subscribed by the person declaring the same.
- statuteN.Y. GOB Law § 5-703enactment date not established
The words that state the rule
3. A contract to devise real property or establish a trust of real property, or any interest therein or right with reference thereto, is void unless the contract or some note or memorandum thereof is in writing and subscribed by the party to be charged therewith, or by his lawfully authorized agent.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.