There appears to be a persistent misconception that if you had a handshake deal with someone (i.e., you never reduced the agreement to writing), and they proceed to break their word (which, in legalese, is referred to as "breaching" the agreement), you are inherently left without any legal recourse to recover the losses you incurred in reliance that the other side would live up to their end of the deal.


It's just not true.


While there are certainly specific types of agreements that must, as a matter of New York law, be reduced to writing (and the failure to do so will, in fact, result in losing any claim to monies owed), such as a contract for the purchase of real estate, or service contracts that inherently cannot be performed within one year, there are many other types of agreements where this statutory requirement is not triggered. (For additional information on how much writing will suffice the Statute of Frauds, please see "Commission Agreements, Finders Fees, and New York's Statute of Frauds").


Assuming your agreement does not fall within the ambit of those that must be reduced to writing as a matter of law (see, e.g., N.Y. Gen. Obl. Law 5-701, et seq., and, as suggested above, is commonly referred to as "the Statute of Frauds"), one of the best ways for you to try and recover your losses is through a claim of promissory estoppel.


The Elements of a Promissory Estoppel Claim


Fortunately, New York's Appellate Division, Second Department has provided fairly clear guidance on what the plaintiff needs to prove in order to prevail on such a claim, stating:


"The elements of a cause of action based upon promissory estoppel are a clear and unambiguous promise, reasonable and foreseeable reliance by the party to whom the promise is made, and an injury sustained in reliance on that promise." Williams v. Eason, 49 AD3d 866, 868 [2008].