No Signature, No Problem: How Breach of Contract Claims Can Survive in New York
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There is an old saying about assumptions, particularly when they are based in a lack of knowledge, and how they end up causing us to look like a certain animal ...
That doctrine is alive and well - particularly when it comes to assumptions about what is - and what isn't - a case under which you can recover what is owed for a breach of contract in New York.
Permit me to explain in greater detail.
One of the most common laments I hear is, "Forget it; I have no claim. Even though we clearly had an agreement, I can't collect what I'm owed because the other side never signed the agreement."
The problem with that line of thought is this:
It's simply not true; there are many instances where, even if you failed to get both sides to an agreement to sign the contract, that doesn't inherently and necessarily mean that you're out of luck.
To be sure, there are some limited instances where the failure to secure a fully executed contract may prove fatal to your claim (particularly under the Statute of Frauds, which lists those circumstances where the New York legislature mandated that the agreement be reduced to a writing), but those are the exception rather than the rule.
In fact, New York's courts have articulated the rule - which is fairly clear - as follows:
“[A] contract may be valid even if it is not signed by the party to be charged, provided its subject matter does not implicate a statute—such as the statute of frauds (General Obligations Law § 5–701)—that imposes such a requirement” ( Flores v. Lower E. Side Serv. Ctr., Inc., 4 N.Y.3d 363, 368, 795 N.Y.S.2d 491, 828 N.E.2d 593). “[A]n unsigned contract may be enforceable, provided there is objective evidence establishing that the parties intended to be bound” ( id. at 369, 795 N.Y.S.2d 491, 828 N.E.2d 593; see **458 Geha v. 55 Orchard St., LLC, 29 A.D.3d 735, 736, 815 N.Y.S.2d 253). “ ‘In determining whether the parties entered into a contractual agreement and what were its terms, it is necessary to look ... to the objective manifestations of the intent of the parties as gathered by their expressed words and deeds' ” ( Flores v. Lower E. Side Serv. Ctr., Inc., 4 N.Y.3d at 368, 795 N.Y.S.2d 491, 828 N.E.2d 593, quoting Brown Bros. Elec. Contrs. v. Beam Constr. Corp., 41 N.Y.2d 397, 399, 393 N.Y.S.2d 350, 361 N.E.2d 999; see Minelli Constr. Co., Inc. v. Volmar Constr., Inc., 82 A.D.3d 720, 721, 917 N.Y.S.2d 687).
So, to conclude with a critical word of advice:
Just because you made one mistake, and failed to secure a fully signed copy of the contract, don't compound that mistake by assuming you can't recover your losses when the other side breaches your agreement. It is certainly worth spending a modest amount of time and money exploring the issue with a lawyer who is knowledgeable about breach of contract issues under New York law.