On November 21, 2023, Justice Cohen of the New York County Commercial Division issued a decision in Bissell St. I, LLC v. Westbrook Partners LLC, 2023 NY Slip Op. 34293(U), holding that the statute of frauds does not over an oral agreement to assess a potential business opportunity, explaining:
Next, Defendants argues that Plaintiffs claims seeking a $300,000 acquisition fee either under the AMA1 or via unjust enrichment-as compensation for their time and effort to identify the opportunity for the Boeing Campus Property and perform the necessary work to effectuate the acquisition, is barred by GOL § 5-701(a)(10). That provision requires that a contract, whether in fact or law, be in writing and signed by the party against whom enforcement is sought if that contract is to pay: compensation for services rendered in negotiating the purchase, sale, exchange, renting or leasing of any real estate or interest therein, or of a business opportunity. Negotiating’ includes procuring an introduction to a party to the transaction or assisting in the negotiation or consummation of the transaction. This provision has been held to apply to finder’s fee agreements.
Defendant has not demonstrated conclusively that the acquisition fee contained in the partially executed AMA is barred by GOL § 5-701(a)(10). The Court of Appeals has warned against the pitfalls of interpreting General Obligations Law 5-701(a)(10) too broadly. The reason for this concern is that too broad an interpretation would extend the writing requirement to situations beyond those intended by the legislature and thus, the application of GOL 5-701(a)(10) should be decided on a case-by-case basis.
Section 5-701 (a) (10) interdicts oral agreements to pay compensation for services rendered with respect to the negotiation of the purchase of real estate or of a business opportunity or business. It does not apply to allegations seeking recovery for work performed so as to inform defendants whether to partake in certain business opportunities, that is, whether to negotiate. To the extent the causes of action are based on such allegations, they are not barred by the statute of frauds. Here, Plaintiffs argue that many of the services they performed extend beyond furthering the negotiation and consummation of the transaction for the Boeing Campus Property, and were made in furtherance of informing Defendants whether to negotiate, such as drafting redevelopment plans, conducting environmental and physical due diligence; identifying and engaging third party consultants; supervising vendors; and reviewing zoning issues. These allegations, at this stage, are sufficient to withstand a motion to dismiss based on GOL § 5-701 (a) (10).
(Internal quotations and citations omitted).