On March 7, 2024, Justice Borrok of the New York County Commercial Division issued a decision in UNO A Brokerage Inc v. Inshur, Inc., 2024 NY Slip Op. 30733(U), holding that an alleged oral commission agreement was barred by the statue of frauds and not saved by alleged part performance, explaining:
General Obligations Law § 5-701(a)(10) requires a signed writing for any contract to pay compensation for services rendered in negotiating a business opportunity, including procuring an introduction to a party to the transaction or assisting in the negotiation or consummation of the transaction.
In Dura v Walker, Hart & Co. (27 NY2d 346, 349 [1971]), the Court recognized that the General Obligations Law is not intended to apply to agreements between fellow finders or finders and third parties. This however is not the arrangement discussed in the AC or which the parties sought to memorialize in the Draft Producer Agreement. Thus, under Dura, it is irrelevant that both Uno and Inshur happen to be brokers because the nature of their arrangement (as discussed above) was really that of principal and broker.
As the Court later explained in Freedman v. Chemical Constr. Corp. (43 N.Y.2d 260, 266-67 [1977]), oral agreements for commissions based on making business introductions are precluded by the statute of frauds. At its core, this is what is at issue here – i.e., Uno was to receive structured commissions in exchange for using its resources and contacts to make business referrals to Inshur.
As it is undisputed that (i) no executed agreement exists between the parties and (ii) that any purported oral agreement between the parties is a commission agreement, Uno’ s claim for breach of contract falls squarely within the statute of frauds under General Obligation Law§ 5-701(a)(10). Uno’ s attempts in their opposition papers to frame the parties’ relationship as like a joint venture are simply inconsistent with the AC and the Draft Producer Agreement.
It is also clear that the oral agreement is also void under General Obligation Law§ 5-701(a)(l) because it was not capable of being performed within one year because the performance of the agreement was dependent upon the will of third parties. The arguments to the contrary based on termination rights fail.
To the extent Uno alleges its claims are exempt from the statute of frauds due to part performance, this argument too fails. The Appellate Division has held that the exception to the statue of frauds for part performance has not been extended to General Obligation Law § 5-701.
(Internal quotations and citations omitted).