Verbal Agreements in New York: What Happens When Trust Isn’t Enough

In business, trust goes a long way. Until it doesn’t. Maybe you shook hands on a project, agreed on payment terms over lunch, or nodded through a deal with someone you've worked with before. 

In a fast-paced place like New York, informal agreements happen every day. But when that verbal promise starts to fall apart, it can leave you feeling stuck and unsure about what comes next.

Verbal contracts may feel simple, but the fallout when they break down can be anything but. One day you’re expecting payment or services, and before long, you’re trying to piece together proof that a deal even existed. 

Our commercial litigation attorneys at Horn Wright, LLP, know the rules around handshake agreements and can help you figure out your next move clearly, confidently, and with your goals in mind.

Can You Really Trust a Verbal Deal? Here's What the Law Says

Here’s the surprising part: verbal contracts can be legally binding in New York. That’s right. You don’t always need a stack of paperwork for a deal to count. But there are rules. And limits. And if you’re not careful, your “deal” could disappear the second there’s a disagreement.

Every valid contract, yes, even a spoken one, needs a few basics:

• An offer (someone says, “I’ll pay you $1,000 to fix my deck”)
• An acceptance (you say, “Deal”)
• Some kind of exchange (you do the work, they pay the money)

Some agreements must be in writing under New York’s Statute of Frauds. These include:

• Real estate deals (buying, selling, leasing property)
• Agreements that can’t be finished in under a year
• Promises to cover someone else’s debt
• Marriage-related agreements
• Transactions for goods worth $500 or more (UCC Article 2)

So your handshake might count, but only if it doesn't land in one of those categories. If you’re unsure whether your agreement holds up, speaking to a Business Dispute Resolution Lawyer might give you the clarity you need.

When a Handshake Isn’t Enough: Proving Your Case in Court

If your deal blows up and you need to take it to court, you're going to need more than just your word. Judges want receipts, literally and figuratively.

You’ve got to prove there was a deal. That can be hard when everything was said, not signed. But it’s doable. Especially if you’ve been smart about what you’ve saved.

Here’s what helps:

• Witness testimony: Got someone who was there when the deal went down? Their memory might be your secret weapon. Judges in New York give serious weight to corroborated stories.
• Texts, emails, or DMs: Any follow-up messages confirming the deal can be golden. Courts often treat these as part of your official “course of dealing.”
• Partial performance: If you started work or paid money already, that can speak volumes. Courts view this as proof that a contract existed, under the NY Gen Obligations Law Section 5-701.
• Your behavior: Did both sides act like there was a deal? Did services happen? Money move? Judges look at the big picture.

Say you began that kitchen renovation. You bought paint, measured cabinets, and maybe sent a few photos along the way. If your neighbor replied, “Looking great so far!” - that casual message just might help prove your point.

But judges aren’t mind readers. If things feel murky or unclear, the court might toss the whole case. That’s especially true in breach of contract claims, where you carry the burden of proof.

Protect Yourself Before It Falls Apart: What You Can Do Now

If you're doing business on a handshake, you’ve got to think ahead. These quick steps can seriously protect you down the line:

• Follow up in writing. After any verbal agreement, shoot over a quick text or email. Something like, “Hey. Just to confirm, you’re paying $2,000 for me to photograph your wedding on June 10th.” That alone could be your safety net. And under the Uniform Commercial Code Section 2-201(2), it might count as legal proof.
• Keep records. Save receipts. Screenshot messages. Track payments. If the deal crashes, this documentation could be your best defense. Small claims judges rely heavily on a solid paper trail.
• Write down names. If someone else heard the agreement, make note of them. One good witness can make all the difference.
• Clarify expectations. The more detailed your agreement, the easier it is to enforce. Vague promises can lead to misunderstandings.

If you make verbal deals often, maybe you're a contractor, freelancer, or small biz owner, think about using simple templates. A short, friendly email can turn your word-of-mouth deal into something enforceable.

Oh, and if you’re dealing with anything that smells like a Statute of Frauds issue (real estate, year-long work, expensive goods)? Get it in writing. Always.

New Yorkers move fast. But when things go sideways, you need more than hustle. A little planning can go a long way.

We're Here to Help When a Verbal Contract Falls Apart

Our commercial litigation lawyers at Horn Wright, LLP, have helped New Yorkers just like you turn messy, broken handshake deals into real legal wins. 

Whether you're facing a disagreement over a project, trying to sort out a partnership gone sour, or knee-deep in a commercial lawsuit nightmare, we’re here for you. Our team has years of experience as a trusted corporate litigation firm, with every tool needed to protect your interests. 

And if you're dealing with internal disagreements, a skilled partnership dispute attorney can help keep your business from breaking down entirely. When it matters most, hire one of the best law firms in America. 

Contact our office today to schedule your FREE, no-obligation consultation. We’ve got your back.