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Are oral contracts binding in New York? When a handshake deal counts

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

In short

Yes — most oral agreements are binding in New York, and you have the same six years to sue over them as over written ones (CPLR § 213(2)). The law requires a signed writing only for certain deals, including agreements that by their terms can't be completed within a year, promises to pay someone else's debt (General Obligations Law § 5-701), sales of real estate and leases longer than a year (§ 5-703), and sales of goods for $500 or more (UCC § 2-201). The real challenge with an oral contract is proof, so save every text, e-mail and payment record.

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

In plain words

Oral contract
An agreement made by talking — in person or by phone — rather than in a signed document.
Statute of frauds
The name lawyers use for the rules that require certain contracts to be in writing and signed.
Party to be charged
The person you are trying to hold to the deal. Their signature is the one that matters.
Memorandum
Any written note that shows the main terms of a deal. It doesn't have to be a formal contract.

The full answer

In New York, a deal doesn't need to be on paper to be a contract. If two people clearly agreed on the key terms and each gave or promised something, an oral agreement is usually enforceable, and a lawsuit over it must generally be started within six years — the same as for a written contract (CPLR § 213(2) covers contracts 'express or implied').

Certain agreements, though, are void unless there is a written note or memorandum signed by the person you want to hold to it (General Obligations Law § 5-701(a)). These include an agreement that by its own terms can't be performed within one year; a promise to answer for someone else's debt, such as co-signing or guaranteeing a loan; an agreement made in consideration of marriage (other than mutual promises to marry); a new promise to pay a debt that was discharged in bankruptcy; and an agreement to pay a finder's fee for negotiating a loan, a real estate deal or the purchase of a business (licensed real estate brokers, lawyers and auctioneers are excluded from that last rule).

Real estate has its own rule: a contract to sell real property, or to lease it for more than one year, must be in a signed writing (General Obligations Law § 5-703(2)). And a contract to sell goods for $500 or more generally isn't enforceable without a signed record showing that a sale was agreed (UCC § 2-201(1)).

Exceptions and special cases

  • Goods of $500 or more without a writing can still be enforceable if the goods were specially made for the buyer and the seller had started making them, if the other side admits in court that there was a deal, or for goods that were paid for and accepted or received and accepted (UCC § 2-201(3)).
  • What counts as 'writing' is broader than a signed paper: the UCC uses the word 'record', and New York gives an electronic signature the same effect as a handwritten one (State Technology Law § 304(2)). E-mails or texts may be enough, depending on what they say and who sent them.
  • Changing a contract: a change or release without anything new in return is valid if it is in writing and signed (General Obligations Law § 5-1103). If a written contract says it can't be changed orally, changes generally must be written and signed (§ 15-301).
  • Home improvement contracts over $500 with a home improvement contractor must be in writing, signed by both sides, with specific terms (General Business Law §§ 770–771).
  • Freelance contracts worth $800 or more must be put in writing by the hiring party (General Business Law § 1412) — but if they aren't, the contract is still valid and the freelancer can still be paid (§ 1415(3)).
  • A promise to pay a debt after the time to sue has run out only counts if it is written and signed (General Obligations Law § 17-101).

What to do now

  1. Write down the deal today

    Note what was agreed, when, where, who was there, and the price. A note made close to the time is more convincing than memory years later.

  2. Confirm it in a message

    Send the other person a short text or e-mail: 'Just confirming we agreed you'd paint the 3 bedrooms for $1,200, done by June 1.' A reply confirming it is strong evidence later.

  3. Gather the proof

    Bank transfers, payment-app notes, invoices, photos of the work, witnesses. Payments and partial performance often show a deal existed.

  4. Check whether your deal needs a writing

    If it's one of the kinds listed above, see whether texts or e-mails signed or sent by the other side cover the main terms. If not, talk to a lawyer before suing.

  5. Act within the time limit

    Six years for most contracts, four years for sales of goods (UCC § 2-725). Send a demand letter, then file in small claims court if needed.

Figures that change

  • Sale of goods that needs a signed record: $500 or more (as of 2026-10-30; N.Y. Uniform Commercial Code)
  • Lease of real property that must be in writing: Longer than one year (as of 2026-10-30; N.Y. General Obligations Law)

Frequently asked questions

Is a text message a written contract?

It can be. The rules ask for a writing or record that shows the deal and is signed by the person you want to hold to it, and New York treats electronic signatures like handwritten ones (State Technology Law § 304(2)). Whether a particular text is enough depends on what it says and who sent it, so keep the whole conversation.

I lent a friend money with no paperwork. Can I get it back?

Often, yes. A simple loan repayable on request isn't one of the deals that must be in writing, and you have six years to sue (CPLR § 213(2)). Your bank records and any message in which your friend acknowledges the loan will be your best evidence.

Does the 'one year' rule mean any long project needs a written contract?

Not necessarily. General Obligations Law § 5-701(a)(1) covers agreements that by their terms can't be performed within one year. A job that could possibly be finished within a year, even if it actually took longer, often isn't covered. If you're unsure, get advice.

We agreed by phone to sell my car for $3,000. Is that binding?

A sale of goods for $500 or more usually needs a signed record (UCC § 2-201(1)). But if the buyer paid and you accepted the payment, or the buyer received and accepted the car, the deal can be enforceable to that extent (§ 2-201(3)(c)).

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Official sources

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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.