When The Written Agreement Is Disputed, Part Performance Can Satisfy The Statute Of Frauds

Here is an excerpt from a trial memorandum we submitted on the issue of whether the Statute of Frauds had been satisfied by partial performance of the parties.  This excerpt sets out the legal standards as developed by caselaw in New York.  

In Pinkava v. Yurkiw, 2009 N.Y. Slip Op 5953, 2 (2nd Dept. 2009), the Supreme Court of New York, Appellate Division, Second Department summarized the Statute of Frauds and the doctrine of part performance:

“The statue of frauds prohibits the conveyance of real property without a written contract (see General Obligations Law § 5-703[1]). While the statute of frauds empowers courts of equity to compel specific performance of agreements in cases of part performance (see General Obligations Law § 5-703[4]), the claimed partial performance “must be unequivocally referable to the agreement” (Messner Vetere Berger McNamee Schmetterer Euro RSCG v Aegis Group, 93 N.Y.2d 229, 235, 711 N.E.2d 953, 689 N.Y.S.2d 674 [1999]; Luft v. Luft, 52 A.D.3d 479, 481, 859 N.Y.S.2d 694 [2d Dept.]. It is not sufficient that the oral agreement gives significance to the plaintiff’s actions. Rather, the actions alone must be ” unintelligible or at least extraordinary,’ [and] explainable only with reference to the oral agreement” (Anostario v. Vicinanzo, 59 N.Y.2d 662, 664, 450 N.E.2d 215, 463 N.Y.S.2d 409 [1983], quoting Burns v. McCormick, 233 N.Y. 230, 232, 135 N.E. 273 [1922]; see Adelman v. Rackis, 212 A.D.2d 559, 561, 622 N.Y.S.2d 564 [2d Dept. 1995].

Significantly, the doctrine of part performance “is based on principles of equity, in particular, recognition of the fact that the purpose of the Statute of Frauds is to prevent frauds, not to enable a party to perpetrate a fraud by using the statute as a sword rather than a shield” (Nicolaides v. Nicolaides, 173 A.D.2d 448, 449-450, 569 N.Y.S.2d 968 [2nd Dept. 1991] [setting aside deed and declaring plaintiff true owner of the property], see Scutti Enters. v. Wackerman Guchone Custom Bldrs., 153 A.D.2d 83, 87, 548 N.Y.S.2d 967) [4th Dept. 1989] [option to purchase land].”

Moreover, even if the written agreements do not satisfy the Statute of Frauds, the Statute is satisfied by the parties’ course of conduct and parole evidence.

“The memorandum exacted by the statute does not have to be in one document. It may be pieced together out of separate writings, connected with one another either expressly or by the internal evidence of subject matter and occasion. Marks v. Cordin, 226 N.Y. 138, 144 (1919) (citations omitted).

A letter agreement or letter of intent containing all the essential terms of the contract is enforceable even where the parties may have intended to negotiate a fuller agreement in the future. Conopco, Inc. v. Wathne Ltd., 190 A.D.2d 587, 593 N.Y.S.2d 787 (1st Dept. 1993); see Bed Bath & Beyond Inc. v. Ibex Construction, LLC, 52 A.D.3d 413, 860 N.Y.S.2d 107 (1st Dept. 2008); Hajdu Nemeth v. Zachariou, 309 A.D.2d 578, 765 N.Y.S.2d 597 (1st Dept. 2003); Lo Cascio v. James V. Aquavella, M.D., P.C., 206 A.D.2d 96, 619 N.Y.S.2d 430 (4th Dept. 1994). Even an unsigned binder that contains material terms can be used as evidence of an oral agreement and satisfy the Statute of Frauds. Dickson v. Mitchell, 87 A.D.2d 697, 697-99 (3d Dept. 1982). The absence of a term such as an amortization table or monthly mortgage payment is not a material omission because it is readily ascertainable. Id.

 

If you have any legal questions or need help with the statute of frauds, please contact Attorney Scott Lanin at (212) 764-7250 x 201 or use the contact form in the right sidebar.

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