A recent decision by the Kings County Commercial Division reaffirms the longstanding New York principle that oral joint venture agreements usually are not subject to the New York Statute of Frauds.1 In Mendelovitz v. Cohen, Justice Carolyn Demarest rejected an argument that the absence of a writing barred enforcement of an alleged oral joint venture agreement, finding that a writing is not required to enforce such an agreement. Because joint ventures ordinarily are terminable at will, the court found that the alleged joint venture agreement was capable of being performed within one year, thereby escaping the reach of the statute of frauds. As an exception to this, Mendelovitz and other courts have recognized that the statute of frauds will apply where the joint venture is formed for a term of more than one year, or where the stated purpose of the joint venture cannot be accomplished within one year.

Established Precedent

Oral joint venture agreements can raise a somewhat vexing question for courts charged with assessing their validity. Although the statute of frauds precludes the enforcement of oral agreements that cannot be performed within a year,2 joint ventures are usually not created for a particular term and, absent an agreement to the contrary, can be terminated at any time. As such, New York courts have generally concluded that the one year provision of the statute of frauds is limited “to those contracts only which by their very terms have absolutely no possibility in fact and law of full performance within one year.”3

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