Partial Performance Does Not Save Dismissal of Oral Agreement Under The Statute of Frauds

• Posted on: Jun 23 2025

By: Jeffrey M. Haber

In Bardy v. Bonnem, 2025 N.Y. Slip Op. 03698 (2d Dept. June 18, 2025) (here), plaintiff claimed an oral agreement entitled him to purchase a 25% ownership interest in a drive-thru coffee business in exchange for developing it. The agreement was allegedly based on a November 13, 2016 email offer, orally accepted three days later. Plaintiff allegedly performed substantial work without compensation, relying on the agreement. When the business succeeded, defendant denied the existence of any deal. Defendant moved to dismiss. The trial court denied the motion, finding the email satisfied the Statute of Frauds and that the agreement could be performed within one year. On appeal, the Appellate Division, Second Department modified the order, holding the email lacked essential terms and thus did not satisfy the Statute of Frauds (GOL § 5-701). The Court also found the agreement could not be completed within one year and rejected the plaintiff’s reliance on partial performance, reaffirming that such an exception does not apply under GOL § 5-701. As discussed below, the breach of contract claim was dismissed.

The Law Governing Oral Agreements

It is well settled that “[i]n 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.”[1] “The manifestation or expression of assent necessary to form a contract may be by word, act, or conduct which evinces the intention of the parties to contract.”[2]

Where the agreement is not in writing, the agreement must satisfy the Statute of Frauds. In New York, the Statute of Frauds is found in General Obligations Law (“GOL”) § 5-701 through 5-705.

“General Obligations Law § 5–701(a)(1) provides that an agreement is void if, by its terms, it ‘is not to be performed within one year from the making thereof’ unless it ‘or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith.’”[3] The statute, therefore, “encompasses only those agreements which, by their terms, ‘have absolutely no possibility in fact and law of full performance within one year.’”[4]  As long as the agreement may be “‘fairly and reasonably interpreted’ such that it may be performed within a year, the Statute of Frauds will not act as a bar however unexpected, unlikely, or even improbable that such performance will occur during that time frame.”[5]

“In order to remove an agreement from the application of the statute of frauds, both parties must be able to complete their performance of the contract within one year.”[6]  A contract that specifically calls for performance after a one year has elapsed cannot be fully performed until that time passes.[7]

The Statute of Frauds is “intended to prevent fraud in the proving of certain legal transactions particularly susceptible to deception, mistake and perjury.”[8] In the context of agreements that cannot be performed within one year, the statute eliminates the need to “trust … the memory of witnesses for a longer time than one year.”[9] By so doing, the Statute of Frauds “preserve[s] the integrity of contracts,”[10] thereby assuring the parties’ confidence in their ability to make and enforce agreements without “being held responsible, by oral, and perhaps false, testimony for a contract that the party claims never to have made.”[11] Moreover, the Statute of Frauds guards against the situation where the party seeking to enforce an alleged oral agreement is also the sole witness to its formation.[12]

One way for parties to avoid the reach of the Statute of Frauds is to identify a writing sent in the course of negotiations that confirms the oral agreement. Under New York law, “a binding contract is formed by an oral acceptance of a written offer.”[13] Thus, a document “which sets forth all of the essential terms of the proposed [transaction],” such as an email, is “sufficient to satisfy the requirements of the statute of frauds” and acceptance may be “made orally without the agreement running afoul of the statute of frauds.”[14]  

The fly in the ointment, however, is the requirement that the writing contain all the material terms of the agreement. Courts reject efforts to circumvent the Statute of Frauds by litigants who rely on emails and other writings that do not contain all the material terms of the parties’ agreement.[15]

Notably, the partial performance doctrine does not save an oral agreement from the application of the Statute of Frauds. The partial performance doctrine provides that an oral agreement that violates the writing requirement of the Statute of Frauds “may nonetheless be enforceable where there has been part performance unequivocally referable to the contract by the party seeking to enforce the agreement.”[16]

Under New York law, the partial performance doctrine “has not been extended to General Obligations Law § 5-701.”[17] Indeed, “[s]ince the nineteenth century, the Court of Appeals has unequivocally rejected a part performance exception to the statute of frauds for contracts that cannot be performed within one year.”[18] 

With the foregoing principles in mind, we examine Bardy v. Bonnem.

Bardy v. Bonnem

Bardy involved an effort by plaintiff to enforce an oral agreement with defendant in which plaintiff was allegedly given an option to purchase a percentage of a drive-thru coffee business that the two had worked on creating and developing.

In October 2016, the parties were introduced to each other by a mutual friend. At the time, Bonnem was attempting to develop and launch a chain of drive-thru coffee establishments modeled on highly successful and rapidly expanding businesses that were operating in the western United States. Plaintiff and Bonnem entered into a series of negotiations in October and November of 2016 regarding the creation of a joint venture that would use Ready Coffee, an entity owned by Bonnem and Parkway Coffee, LLC, for this drive-thru coffee business.

Plaintiff alleged that on November 13, 2016, Bonnem made a written proposal (in an email) that reflected his discussions with plaintiff, which the parties orally accepted on November 16, 2016 (the “Agreement”). The Agreement allegedly provided that in exchange for plaintiff working to develop Ready Coffee as a drive-thru coffee business, plaintiff would be given an option to purchase a 25% ownership interest in Ready Coffee, which plaintiff could acquire in two steps: (1) payment of $180,000.00 for an 18% ownership interest therein after the first drive-thru coffee location had opened; and (2) payment for an additional 7% ownership interest in Ready Coffee after the third year of Ready Coffee’s drive- thru coffee business, with Ready Coffee to be valued at $5 million for purposes thereof. The Agreement also included other terms, including that Ready Coffee would reimburse plaintiff for travel expenses.

Plaintiff maintained that after Ready Coffee opened its first drive-thru coffee location in February 2019, which was immediately successful, plaintiff advised Bonnem that, pursuant to the Agreement, plaintiff was ready to purchase his initial 18 percent ownership interest in Ready Coffee. Plaintiff alleged that Bonnem claimed the parties never made a deal and that plaintiff’s efforts to develop Ready Coffee were done solely on a volunteer basis.

In his amended complaint, plaintiff asserted: (1) a first cause of action for breach of contract against Bonnem; (2) a second cause of action for unjust enrichment against all defendants; (3) a third cause of action for quantum meruit against all defendants; (4) a fourth cause of action for breach of fiduciary duty against Bonnem; (5) a fifth cause of action for constructive trust against all defendants; and (6) a sixth cause of action for accounting against all defendants.

Defendants moved to dismiss the amended complaint pursuant to CPLR 3211(a)(5) and (a)(7).  Defendants argued (1) the breach of contract claim was barred by the Statute of Frauds and, in any event, failed because the alleged oral agreement lacked definite terms; (2) the equitable claims failed because they impermissibly sought to enforce an unenforceable oral agreement; (3) the breach of fiduciary duty claim was defective because plaintiff did not allege the essential elements of a partnership; and (4) without a well-pled unjust enrichment or breach of fiduciary duty claim, the constructive trust and accounting claims necessarily failed.

The motion court denied defendants’ motion in its entirety. Relevant to today’s article, the motion court found that dismissal based on the Statute of Frauds was “unwarranted,” because the relevant agreement was not the November 16 oral agreement, but rather the November 13 email, which plaintiff “orally accepted” on November 16.  The motion court found that the November 13 email proposal satisfied the Statute of Frauds because it “set[] forth all of the essential terms” of the Agreement. The motion court also found that the Agreement was outside the Statute of Frauds, because it could have been performed within one year. In this regard, the motion court noted that the first step of the purported agreement—plaintiff’s “acquisition of the 18 percent interest in Ready [Coffee]”—“could have been performed within one year of the Agreement.” Defendants appealed.

On appeal, the Second Department modified the motion court’s order, holding that, inter alia, plaintiff’s breach of contract cause of action should have been dismissed.

The Court found that the November 13, 2016 email failed to satisfy the Statute of Frauds.[19] The Court explained that the November 13, 2016 email failed to set forth the full scope of the alleged agreement between plaintiff and Bonnem.[20] “In order to satisfy the statute of frauds,” said the Court, “‘a memorandum, subscribed by the party to be charged, must designate the parties, identify and describe the subject matter, and state all the essential terms of a complete agreement.’”[21] The Court concluded that the November 13, 2016 email failed to include such information without resort to parol evidence.[22]

The Court also held that the Agreement could not be performed within one year: “While the plaintiff alleges that he provided services to Ready Coffee in order to leave open the option to purchase, the terms of the contract as alleged by the plaintiff can only be completed after three years.”[23]

Finally, the Court rejected plaintiff’s reliance on the partial performance doctrine to escape dismissal under the Statute of Frauds. The Court explained that “the exception to the Statute of Frauds for part performance has not been extended to General Obligations Law § 5-701, and so any evidence tending to show partial performance would not obviate the requirement of a written agreement.”[24]

Takeaway

Bardy is notable because it reinforces several contract law principles.[25] For example, Bardy reaffirms that oral agreements not performable within one year are unenforceable unless memorialized in a writing that includes all essential terms. Courts will not infer or supplement missing terms with parol evidence.

Bardy also underscores that the partial performance doctrine does not apply to contracts governed by GOL § 5-701. Even substantial efforts to perform by one party will not validate an oral agreement if it falls under this statute.

Finally, Bardy makes clear that email communications must be complete. While emails can satisfy the Statute of Frauds, they must contain all material terms of the agreement. Incomplete emails, even if orally accepted, are insufficient.

____________________________________

Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice.

[1] LaGuardia v. Brennan Beer Gorman/Architects, LLP, 175 A.D.3d 1280, 1281 (2d Dept. 2019).

[2] Id.; see also Gator Hillside Village, LLC v. Schuckman Realty, Inc., 158 A.D.3d 742, 743 (2d Dept. 2018); Daimon v. Fridman, 5 A.D.3d 426, 428 (2d Dept. 2004).

[3] Stillman v. Kalikow, 22 A.D.3d 660, 661 (2d Dept. 2005) (citation omitted).

[4] Id. (citations omitted).

[5] Id. at 662 (citations omitted); see also Moon v. Moon, 6 A.D.3d 796, 798 (3d Dept. 2004) (if “there might be any possible means of performance within one year … the one-year provision does not apply”).

[6] Hamburg v. Westchester Hills Golf Club, Inc., 96 A.D.3d 802, 802 (2d Dept. 2012) (citations omitted); Freedman v. Chem. Constr. Corp., 43 N.Y.2d 260, 265 (1977); Durante Bros. Constr. Corp. v. Coll. Points Sports Ass’n, 207 A.D.2d 379, 380 (2d Dept.1994) (duration of the alleged agreement as a whole—not a single provision—is the dispositive factor).

[7] See, e.g., Sheehy v. Clifford Chance Rogers & Wells LLP, 3 N.Y.3d 554, 559-62 (2004) (oral agreement under which partner was to receive supplemental annual payments “begin[ning] … five years after his retirement” was subject to § 5-701(a)(1)); Klein v. James Purveyors, Inc., 108 A.D.2d 344, 347-48 (2d Dept. 1985) (alleged oral agreement requiring performance “‘upon the death of’ shareholders [b]y its terms … could be fully performed only after a shareholder’s death” for Statute of Frauds purposes).

[8] D & N Boening, Inc. v. Kirsch Beverages, Inc., 63 N.Y.2d 449, 453-54 (1984).

[9] Id. (citation omitted).

[10] Dorfman v. Reffkin, 144 A.D.3d 10, 15 (1st Dept. 2016)

[11] William J. Jenack Estate Appraisers & Auctioneers, Inc. v. Rabizadeh, 22 N.Y.3d 470, 476 (2013) (citation omitted).

[12] See, e.g., D & N Boening, 63 N.Y.2d at 452, 458 (alleged indefinite oral franchise agreement asserted by exclusive franchisee void under Statute of Frauds); Dorfman, 144 A.D.3d at 19 (alleged oral agreement for plaintiff to “provid[e] business know-how” to defendants invalid).

[13] Morton’s of Chicago/Great Neck LLC v. Crab House, Inc., 297 A.D.2d 335, 337 (2d Dept. 2002).

[14] Mor v. Fastow, 32 A.D.3d 419, 420 (2d Dept. 2006); see also Atai v. Dogwood Realty of N.Y., Inc., 24 A.D.3d 695, 698 (2d Dept. 2005) (“a writing may satisfy the statute of frauds and be enforced as a contract where it identifies the parties, describes the subject matter, states all of the essential terms of an agreement, and is signed by the party to be charged”).

[15] See, e.g., Naldi v. Grunberg, 80 A.D.3d 1, 3 (1st Dept. 2010); Dahan v. Weiss, 120 A.D.3d 540, 542 (2d Dept. 2014); Levinson v. 77 Perry Realty Corp., 212 A.D.3d 464, 465 (1st Dept. 2023); Birnbaum v. Goldenberg Consulting Grp., Inc., 201 A.D.3d 432, 432-33 (1st Dept. 2022); Streit v. Bombart, 187 A.D.3d 529, 530 (1st Dept. 2020).

[16] Matter of Zelouf, 183 A.D.3d 900, 902 (2d Dept. 2020) (citation omitted).

[17] Zelouf, 183 A.D.3d at 902 (citation omitted).

[18] Gural v. Drasner, 114 A.D.3d 25, 30 (1st Dept. 2013) (collecting cases); see also Messner Vetere Berger McNamee Schmetterer Euro RSCG Inc. v. Aegis Grp. plc, 93 N.Y.2d 229, 234 n.1 (1999).

[19] Slip Op. at *1

[20] Id.

[21] Id. (quoting, Hopwood v. Infinity Contr. Servs. Corp., 230 A.D.3d 570, 571 (2d Dept. 2024) (quoting Best Global Alternative, Ltd. v. FCIC Constr. Servs., Inc., 170 A.D.3d 1101, 1103 (2d Dept. 2019)).

[22] Id. (citations omitted).

[23] Id.

[24] Id. (internal quotation marks and citations omitted).

[25] To find articles related to the Statute of Frauds, emails as enforceable contracts, and partial performance, visit the “Blog” tile on our website and enter the search terms “oral agreement” “Statute of Frauds,” “emails” and “partial performance” or any other related search term in the “search” box.