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Someone broke a contract with you in New York: what the law says and what to do

Updated By The editorial teamNot reviewed by an attorney — based on the official sources below

In short

If someone didn't do what they promised in a contract — didn't pay, didn't deliver, or did the job badly — you can usually ask a court for the money that puts you where you would have been if the promise had been kept. In New York you generally have six years to sue over a contract (CPLR § 213(2)), but only four years for a sale of goods (UCC § 2-725). Start by rereading the agreement, gathering proof, and sending a written demand. If that doesn't work, small claims court handles claims up to $10,000 in New York City and $5,000 or $3,000 elsewhere.

Read on for the details, the exceptions and the sources.

In plain words

Contract
An agreement the law will enforce. It can be written, oral, or shown by how people acted — though some kinds must be in writing.
Breach
Breaking a contract: not doing what you promised, doing it late, or doing it badly, without a legal excuse.
Damages
Money a court orders to make up for your loss — usually the amount that puts you where you would have been if the contract had been kept.
Statute of limitations
The deadline to start a lawsuit. After it passes, the other side can usually get the case thrown out.
Mitigate
Take reasonable steps to keep your loss from growing, such as hiring someone else to finish the job.

What the law says, briefly

Most of the rules about contracts in New York come from court decisions rather than one statute, but a few statutes set the key limits. A contract is an agreement in which each side gives or promises something. When one side fails to keep its promise without a legal excuse, that is a breach, and the other side can ask a court for damages — usually the money that puts you in the position you would have been in if the contract had been kept. Courts generally expect you to take reasonable steps to limit your loss, and they usually don't award extra 'punishment' money for an ordinary broken contract.

You generally have six years to sue over a contract, written or oral (CPLR § 213(2)). If the contract is for the sale of goods, the limit is four years from the breach, and the original agreement may shorten it to as little as one year (UCC § 2-725(1)). If you win money because of a broken contract, the court adds interest (CPLR § 5001), usually at 9% a year — but 2% a year when the claim is a consumer debt owed by an individual (CPLR § 5004). If you bought goods and kept them, you must tell the seller about the problem within a reasonable time after you discover it, or you may lose your remedies (UCC § 2-607(3)(a)).

What to check in your lease, contract or papers

  • Exactly what each side promised: the work, the goods, the price, the dates.
  • Whether a deadline was 'of the essence' — that is, whether being late is itself a serious breach.
  • Any clause on how to give notice, how to cancel, or a chance to fix ('cure') a problem before the other side is in breach.
  • Any clause that shortens the time to sue. New York allows a shorter limit by written agreement (CPLR § 201).
  • A 'no oral changes' clause: if the written contract says it can't be changed orally, a later change generally has to be in writing and signed (General Obligations Law § 15-301).
  • Any arbitration clause, a fixed 'liquidated damages' amount, or a clause about who pays lawyers' fees.

What to document

  • The contract itself, or — for an oral deal — every text, e-mail or note that shows what was agreed.
  • Proof of what you paid: receipts, bank or card statements, canceled checks, payment-app records.
  • The date of the breach: when payment was due and missed, when the work stopped, when the goods arrived damaged.
  • Photos or video of defective work or goods, with dates.
  • What it cost you: quotes or invoices from someone else to finish or fix the job, replacement costs.
  • A short timeline written while you still remember it.

What to do, step by step

  1. Reread the agreement

    Find the exact promise that was broken and any clause about notice, cancellation or time limits. If there's no written contract, collect the messages that show the deal.

  2. Talk, then put it in writing

    A phone call can clear up a misunderstanding, but follow it with a short e-mail or text summarizing what was said, so you have a record.

  3. Limit your loss

    Take reasonable steps so the damage doesn't grow — for example, get quotes from another contractor. Keep the receipts; they help prove your damages.

  4. Send a demand letter

    State what was agreed, what went wrong, the exact amount you want, and a firm date to pay (often 10 to 14 days). Keep a copy and proof of sending.

  5. File in court if needed

    Small claims court handles money claims up to $10,000 in New York City, $5,000 in city and district courts, and $3,000 in town and village courts. Larger claims go to the regular civil courts.

What not to do

  • Don't stop doing your own part without thinking it through. If you stop paying or stop working, the other side may say you broke the contract first.
  • Don't let the loss grow when you could reasonably prevent it — a court may not let you recover the part you could have avoided.
  • Don't rely only on phone calls; put every important point in writing.
  • Don't wait for years. The six-year and four-year limits run whether or not you are still negotiating.
  • Don't threaten things you don't intend to do, or anything unrelated to the money owed.

When to send a demand letter

Send it once it is clear the other side won't fix the problem on its own — after a missed payment date, a stalled job, or a refusal to replace defective goods. If you bought goods, give notice of the problem promptly; the law expects it within a reasonable time (UCC § 2-607(3)(a)). A clear letter that names the amount and a deadline often settles the matter, and it is useful evidence if you go to court.

When to go to court

If the date in your letter passes, you can file. If you are an individual and the amount is within the small claims limit, small claims court is designed for people without lawyers and has low filing fees. A corporation, partnership or association can't sue in small claims; it uses the commercial claims part instead (New York City Civil Court Act §§ 1809, 1809-A). If your business is an LLC, ask the clerk which part to use. Bring the contract, proof of payment, your photos, repair quotes, and your demand letter. For larger or more complicated disputes — or if the contract has an arbitration clause — it's worth talking to a lawyer.

What evidence to keep

  • The contract or the messages that show the deal
  • Proof of every payment
  • Photos and video of the problem
  • Estimates, invoices and receipts showing your loss
  • Your demand letter and proof it was delivered
  • All messages with the other side

Figures that change

  • Time to sue over a contract (general): 6 years (as of 2026-10-30; N.Y. Civil Practice Law and Rules)
  • Time to sue over a sale of goods: 4 years (can be shortened to 1 year by the original agreement) (as of 2026-10-30; N.Y. Uniform Commercial Code)
  • Interest on a contract award: 9% a year (2% on a consumer debt owed by an individual) (as of 2026-10-30; N.Y. Civil Practice Law and Rules)
  • Small claims limit — New York City: $10,000 (as of 2026-10-30; New York City Civil Court Act)
  • Small claims limit — city and district courts: $5,000 (as of 2026-10-30; N.Y. Uniform City Court Act)
  • Small claims limit — town and village courts: $3,000 (as of 2026-10-30; N.Y. Uniform Justice Court Act)

Frequently asked questions

We never signed anything. Do I still have a contract?

Often, yes. Many oral agreements are enforceable in New York, and the six-year limit in CPLR § 213(2) covers contracts 'express or implied.' A few kinds must be in writing — for example, a sale of goods for $500 or more (UCC § 2-201) or a deal that by its terms can't be completed within a year (General Obligations Law § 5-701). The harder part is proving what was agreed, so gather every message.

Can I get my lawyer's fees back if I win?

Usually only if the contract says the winner gets fees or a specific statute allows it. Otherwise each side normally pays its own lawyer. In small claims court most people don't use a lawyer at all.

Will the court add interest to what I'm owed?

Yes. When money is awarded because of a broken contract, CPLR § 5001 requires interest, generally from the date of the breach. The usual rate is 9% a year, but it is 2% a year on a consumer debt owed by an individual (CPLR § 5004).

The contract says I must sue within one year. Is that allowed?

Often it is. CPLR § 201 allows a shorter time limit set by written agreement, and for sales of goods the parties may cut the four-year limit to as little as one year (UCC § 2-725(1)). Courts may refuse to enforce a period that is unreasonably short, so if you're close to such a deadline, get advice quickly.

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Official sources

This page was written from the sources below. “Checked” is the date the source was last opened and read.

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This page is general information based on the official sources listed, current as of the update date. It is not legal advice and does not replace a review of your own situation; if a case is already in court, a deadline is close, the amount is large, or there are criminal, immigration or family-law consequences, talk to a lawyer or legal aid.