The Statute of Frauds Will Save You

The Statute of Frauds Will Save You

Suffolk County Supreme Court Justice Emerson held that an oral agreement to take over a commercial lease violates the statute of frauds and is unenforceable. See, Soldano v. Precision CNC Corp., 35607-12, NYLJ 1202624618963, at *1 (Sup., Suf.). The heart of the decision is stated below as reported in the NYLJ.

The court finds that the lease-takeover agreement is unenforceable under the statute of frauds as a contract for an interest in real property for a period of more than one year (see, General Obligations Law §5-703). The plaintiffs’ contentions to the contrary notwithstanding, the purpose of the lease-takeover agreement was to obtain an interest in real property. According to the plaintiffs, they agreed to allow Napolitano and Precision to negotiate a new lease with the landlord so that they could continue to maintain their business at the same location after they were evicted. What the plaintiffs are describing is, in effect, a sublease with Napolitano and Precision as the tenants and the plaintiffs as the subtentants. Napolitano and Precision entered into a lease with the landlord for a period of three years. Thus, the alleged oral agreement between the plaintiffs and the defendants Napolitano and Precision to take over the lease is unenforceable (see, Gluck v. New Amsterdam Estates, Inc., 192 Misc 134 [alleged oral contract between two plaintiffs for the exchange of their respective apartments was held to be unenforceable under the statute of frauds because the lease to one of the plaintiffs was for a term of three years]). Accordingly, the first cause of action is dismissed.

An agreement that is unenforceable under the statute of frauds is unenforceable for all purposes and cannot be the basis of another action (61 NY Jur 2d Frauds, Statute of §312). Such a contract confers no rights and creates no obligations between the parties, and no claim can be founded on it against third persons (Id.). It cannot be enforced either directly or indirectly in an action for damages for breach, for specific performance, for fraud and deceit if that action depends on proof of the oral agreement, or for malicious interference therewith (Id.). In short, the ban of the statute of frauds extends to any device calculated to evade the legislative mandate rendering unenforceable the original obligation (Id.).

By | 2013-10-30T14:42:13+00:00 October 30th, 2013|