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PLAINTIFF’S SUBMISSIONS RAISED A QUESTION OF FACT WHETHER THE ORAL AGREEMENT THAT DEFENDANT WOULD BUY PLAINTIFF’S HOUSE FOR $40,000, OTHERWISE VOID UNDER THE STATUTE OF FRAUDS, WAS ENFORCEABLE BECAUSE IT WAS PARTIALLY PERFORMED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined there was a question of fact whether part performance took the oral contract to purchase property out of the statute of frauds. Plaintiff allowed defendant to move in to plaintiff’s vacant house. At some point, plaintiff and defendant entered an oral agreement that defendant would buy the house for $40,000:

… [P]laintiff submitted, inter alia, defendant’s deposition testimony. Defendant testified that he and plaintiff were friends and that plaintiff allowed him to move into plaintiff’s then-vacant home in 2019 with no agreement to pay rent. Sometime thereafter, the parties orally agreed that, over a period of three years, defendant would pay plaintiff $40,000 for the purchase of the home. Defendant was to pay $600 per month during the first year, and there was no specified payment schedule for the remainder of the term. Defendant made 12 monthly payments of $600 in the first year and thereafter made various lump-sum payments to plaintiff, for a total of $33,200. Defendant also tendered the funds to pay the outstanding balance, but plaintiff rejected that payment and commenced court proceedings. * * *

Although such an oral agreement would generally be unenforceable under the statute of frauds, which provides, inter alia, that a “contract for . . . the sale[ ] of any real property . . . is void unless the contract or some note or memorandum thereof, expressing the consideration, is in writing” … , an exception exists “in cases of part performance” … , i.e., where a party to an otherwise unenforceable oral agreement has partially performed under it. The exception is an equitable one, which recognizes that a party may “waive [the] protection [of the statute of frauds] . . . by inducing or permitting without remonstrance another party to the agreement to do acts, pursuant to and in reliance upon the agreement, to such an extent and so substantial in quality as to irremediably alter [the] situation and make the interposition of the statute against performance a fraud” … . Importantly, “[t]he [part] performance must be unequivocally referable to the agreement” … . Dacko v Kiladze, 2025 NY Slip Op 07165, Fourth Dept 12-23-25

Practice Point: Part performance of an oral contract to buy real estate may render the otherwise void contract enforceable.

 

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