Sometimes, a handshake isn't good enough - at least under New York law. When you fail to reduce your agreement to writing, there is the very real risk that you may be out of luck if the other party to the agreement breaches their end of the deal. And the reason has a name:
The Statute of Frauds.
If your agreement falls under one of these categories and it isn't reduced to writing, a New York court is required to hold the agreement unenforceable as a matter of law.
Some Important Exceptions to the Statute of Frauds
As with most rules, there are some ways to try to circumvent the Statute of Frauds - even if you failed to reduce your agreement to any form of writing. Perhaps the most practical way of doing so, however, is demonstrating that despite the lack of a writing, a significant part of the agreement had been performed, whose only real explanation would be that these actions were taken because a clear agreement had been reached.
In other words, if the actions that were performed were "merely steps taken in contemplation of a future agreement," that will not suffice to take a case outside the ambit of the Statute of Frauds. See, e.g., General Obligations Law 5-703; Messner Vetere Berger McNamee Schmetterer Euro RSCG v. Aegis Group, 93 N.Y.2d 229, 235, 237 (1999).
New York's courts have also explicitly excluded agreements to create a joint venture from the Statute of Frauds because they typically have no specific time element or requirement (and therefore, fall outside the ambit of 5-701(a)(1)), stating:
"The statute of frauds is generally inapplicable to an agreement to create a joint venture (F.S. Intertrade Off. Prods. v Babina, 199 AD2d 95, 96 , lv denied 83 NY2d 757 ) or partnership (Prince v O'Brien, 234 AD2d 12 ;Rella v McMahon, 169 AD2d 555 ). This is because, absent any definite term of duration, an oral agreement to form a partnership or joint venture for an indefinite period creates a partnership or joint venture at will (see Shandell v Katz, 95 AD2d 742, 743  [partnership at will may be dissolved, without liability for breach of contract, on a "moment's notice"];Alnwick v European Micro Holdings, Inc., 281 F Supp 2d 629, 644 [ED NY 2003] ["Where . . . there is no definite term of duration for the joint venture, it may be terminated at will"]).