Commercial Division Blog

Posted: February 13, 2015 / Categories Commercial, Contracts

Statute of Frauds Can be Satisfied by Multiple Writings Read Together

On February 3, 2015, Justice Emerson of the Suffolk County Commercial Division issued a decision in Agosta v. Fast System Corp., 2015 NY Slip Op. 50107(U), discussing the statute of frauds' writing requirement.

In Agosta, the plaintiffs sought summary judgment on the defendants' counterclaims on, among other grounds, that the claim was barred by the statute of frauds. The court rejected that argument, explaining:

[N]o integrated, written agreement was executed by the parties. However, it is well established that the statutorily required writing need not be contained in a single document, but may be furnished by piecing together other, related writings. Signed and unsigned writings can be read together to satisfy the statute, provided they clearly refer to the same subject matter or transaction and contain all of the essential terms of a binding contract. At least one writing establishing a contractual relationship between the parties must be signed by the party to be charged. Moreover, parol evidence may be used to connect the separate documents and to show that there was asset by the party to be charged to the contents of the unsigned writings.

Construing the evidence in the light most favorable to FAST, the court finds that the plaintiffs have failed to meet their burden of demonstrating as a matter of law that there is no writing which satisfies General Obligations Law § 5-701(a)(1). The signed and unsigned writings, when read together, are sufficient to establish the parties' agreement. They reveal that Agosta was to receive $1,000,000, 5% of the royalties, $100 an hour for his labor, and a 40% interest in FAST in exchange for the assignment of his "patents" to FAST; that Agosta's 40% interest would not be diluted until major-investor funding was obtained; and that the patent or patents would revert back to Agosta if not monetized within 5 years. Agosta's signature appears on the assignment of the ammonia patent to FAST and on FAST's subchapter-S election forms. The signature of Agosta's attorney appears on the letter dated January 28, 2013, to Schlam, and Agosta's first name is typed under his email to Schlam dated January 22, 2012 (see, Newmark & Co. Real Estate Inc. v 2615 E. 17 St. Realty LLC, 80 AD3d 476, 477 [an email sent by a party, under which the sending party's name is typed, can constitute a writing for purposes of the statute of frauds]. The court finds that this evidence is sufficient to establish a contractual relationship between the parties.

(Internal quotations and some citations omitted) (emphasis added).