Contracts: types, the essentials of a valid contract, and the statute of frauds

Classify the agreement

An express contract states its terms in words; an implied-in-fact contract arises from conduct showing agreement. A bilateral contract exchanges promises, as when a buyer promises to pay and a seller promises to convey. A unilateral contract invites acceptance through performance of the requested act. Executory means performance remains due; executed means the contractual performance is complete. One agreement can fit several of these classifications.

Check the essentials

A valid contract requires capable parties, mutual assent through offer and acceptance, consideration, and a lawful purpose, with sufficiently definite terms. Consideration is the bargained-for exchange, such as promises exchanged; it is not necessarily an earnest-money deposit. A counteroffer changes the proposed bargain rather than accepting it. Fraud, duress, or undue influence can undermine genuine consent.

Void means without legal effect. Voidable means a protected party may elect to avoid the agreement. Unenforceable describes an agreement that cannot be enforced in court because of a legal barrier. These labels answer different questions from whether performance is finished.

Apply New York's writing rules

Under General Obligations Law § 5-703(2), a contract for a real property sale, or a lease for longer than one year, is void unless the contract or a note or memorandum expressing the consideration is in writing and subscribed by the party to be charged, or that party's lawful agent authorized in writing. The party to be charged is the party against whom enforcement is sought. A quick closing does not remove the writing requirement for a sale. A lease of exactly one year does not exceed this subsection's lease threshold.

Section 5-703(1) separately governs creation and transfer of real property interests and excepts a lease for a term not exceeding one year; it also recognizes acts or operation of law. Section 5-703(3) requires a signed writing for contracts to devise real property or establish a real property trust. Section 5-703(4) preserves courts' equitable power to compel specific performance in cases of part performance. Do not assume a payment alone settles a disputed exception; obtain legal advice about a particular transaction.

Keep residential leases readable

New York General Obligations Law § 5-702 requires covered written residential leases to use clear, coherent, everyday words and appropriately divided, captioned sections. It excludes agreements involving amounts exceeding $250,000 and permits wording required by law. A violation does not make the agreement void or voidable or supply a defense to enforcement or breach. Plain language and a required signed writing are distinct requirements.