On January 17, 2020, Justice Cohen of the New York County Commercial Division issued a decision in Lentini v. William Capital Assoc., Inc., 2020 NY Slip Op. 30145(U), holding that the statute of frauds does not apply to an oral agreement to create a joint venture, explaining:
Defendants have not conclusively established their defenses as a matter of law. First, although the statute of frauds bars oral agreements concerning the purchase or sale of a business interest, including a majority of the voting stock interest in a corporation and including the creating of a partnership interest, the statute of frauds is generally inapplicable to an agreement to create a joint venture. Here, Joseph sufficiently alleges the existence of an arrangement closely akin to that of a joint venture, in which, at all relevant times, the Brothers understood, knew and agreed that they would advance their business interests together as equal partners with equal rights to, among other things, management and profits. Giving Joseph the benefit of every favorable inference, the indicia of a joint venture may be implied from the totality of the conduct alleged here.
(Internal quotations and citations omitted).
New York contract law–usually straightforward–has traps for the unwary, like the requirement that some contracts be in writing (the statute of frauds). Contact Schlam Stone & Dolan partner John Lundin at firstname.lastname@example.org if you or a client face a situation where you are unsure how to enforce rights you believe you have under an oral contract.
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