On May 23, 2025, Justice Patel of the New York County Commercial Division issued a decision in Essence Communications LLC v. Group Black Inc., 2025 NY Slip Op. 31934(U), holding that the Statute of Frauds, which bars oral agreements to assist in negotiating a business opportunity, does not apply to an oral agreement to provide information used to facilitate sales, explaining:
General Obligations Law § 5-701(a)(10) provides that a contract to pay compensation for services rendered in negotiating a business opportunity is void unless in writing and signed by the party to be charged. Group Black contends that Plaintiffs seek to enforce precisely such an agreement—namely, an oral arrangement for a commission-based finder’s fee rendering the claim barred by the statute.
This argument mischaracterizes the nature of the alleged relationship. Plaintiffs do not allege that Group Black merely introduced them to advertisers in exchange for a commission. Rather, they assert that Group Black functioned as an intermediary that aggregated and resold Plaintiffs’ advertising inventory pursuant to a detailed revenue-sharing arrangement reflected in a series of insertion orders, invoices, draft agreements, and internal communications.
The Court finds that General Obligations Law § 5-701(a)(10) does not bar Plaintiffs’ breach of contract claim at this stage. That provision applies only to oral agreements for compensation for services rendered in negotiating the purchase of a business opportunity, including procuring introductions or assisting in the negotiation or consummation of such a transaction. The statute does not reach services that are operational in nature or performed to inform a party whether to engage in a business opportunity, rather than to negotiate its terms. Here, Plaintiffs do not allege that Group Black merely introduced them to advertisers or negotiated on their behalf. Rather, Plaintiffs contend that they provided extensive editorial, digital, and event services to fulfill brand campaigns arranged through Group Black, and that Group Black collected payments from advertisers without remitting Plaintiffs’ agreed-upon share. Accepting these allegations as true and drawing all reasonable inferences in Plaintiffs’ favor, the Court finds that the services as alleged fall outside the scope of the statute. Accordingly, Defendant’s Motion to Dismiss the breach of contract claim on Statute of Frauds grounds is denied.
(Internal quotations and citations omitted).