Legal Question in Real Estate Law in New York

While I would need some more facts to give you a precise answer, based upon your description of the situation, it sounds like your girlfriend will have a tough time getting you to refund her that money. If the amount is under $4,000, she can file a small claims court action, try and introduce proof that her car was provided to you to secure the new car, but her biggest legal hurdle is proving that there was any agreement between you and she that would require you to pay any monies to her for her surrender of her car. Without a written agreement, you could invoke a legal doctrine called "The Statute of Frauds." This doctrine in an old English law from the 1600s that we have adopted and continue to use in the modern US legal system. The Statute of Frauds is a device employed as a defense in a breach of contract lawsuit. The law's purpose is to prevent the possibility of a nonexistent agreement between two parties being "proved" by perjury or Fraud. This objective is accomplished by requiring that particular contracts not be enforced unless a written note or memorandum of agreement exists that is signed by the persons bound by the contract's terms or their authorized representatives.

If you invoke the statute of frauds should she sue you, you will be able to prove that the contract you have failed to comply with is legally unenforceable because it has not satisfied the requirement of the statute. As a result, you cannot be held legally liable for a breach of contract.

Of course I am simplifying the Statute of Frauds above, so I highly recommend that if you plan on using this defense that you consult with a qualified attorney with whom you can discuss the facts of the case in detail.