What Makes a Contract Not Enforceable in New York?

Learn What Makes a Business Contract Not Enforceable in New York

Contracts are essential to good business. They help ensure that parties to an agreement carry out the promises they’ve made. But just because a document is called a contract doesn’t mean the courts will enforce it. Some agreements don’t meet the necessary legal criteria to be considered contracts. Others violate public policy or have some other flaw.

The New York business attorneys of Rosenbaum & Taylor look at examples of contracts that are unenforceable.

Legal Formalities Have Not Been Met

A valid contract in New York must have these three basic elements:

  • Offer – A party proposes terms of the agreement.
  • Acceptance – The other party accepts those terms (a counteroffer is not an acceptance).
  • Consideration – Something of value like goods, services, or money must be exchanged.

Contracts come in different forms such as express, implied-in-fact, and quasi-contracts. A New York business law attorney can explain the various types of contracts recognized in the state. But in general, they must contain the above elements to be valid and enforceable.

A Written Contract May Be Required

Although contracts can be oral, certain ones must be in writing. This is required by what’s known as the statute of frauds. In New York, these types of contracts must be written to be enforceable:

  • A contract for the sale of goods of $500 or more
  • A contract that will take more than one year to perform
  • A contract involving the sale or lease of real estate
  • A contract in which one party assumes responsibility for the financial obligations of someone else
  • A contract involving a promise to pay a debt discharged in bankruptcy
  • Some contracts made in consideration of marriage
  • A contract involving a promise to make a testamentary disposition

The Breach Is Outside the Statute of Limitations

If a party breaches your contract, you can go to court to enforce it. However, you don’t have an unlimited amount of time to do so. There is a deadline to take legal action that is known as a statute of limitations. For most New York contracts, a party has six years to file a lawsuit to seek damages or compel performance. If the lawsuit is filed too late a court will dismiss it and therefore won’t enforce the contract.

The Contract Was Obtained by Fraud or Duress

A court won’t enforce a fraudulent contract. Fraud comes in many forms, from forged signatures to lying to a party to trick them into an agreement. Your New York business law attorney can explain how to prove or disprove contract fraud allegations. Also, a contract that was signed under duress won’t be enforced. Duress would include, for instance, threatening someone’s safety if they refuse to sign the contract.

The Contract Is Against the Law or Public Policy

A court will obviously not enforce a contract to hire a hitman to murder someone. Any sort of illegal contract is simply unenforceable. Some contracts, however, are said to violate public policy. For example, an overly restrictive non-compete agreement might not be enforced. A New York business lawyer can explain whether a contract may violate public policy.

Do You Have Questions About Your Contracts?

Are you concerned that the contracts you have might be unenforceable? Are you contemplating entering a contract but want to make sure a court will uphold it? Rosenbaum & Taylor’s New York business law attorneys can answer these and other questions. Reach out to us today to learn more.

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