Question

You are interviewed by a prospective employer concerning a job that you have coveted for several years. After protracted (lengthy) negotiations, you are presented with a pre-printed form contract that contains the terms of your employment agreement.  

In the body of the agreement, it states, “This document contains the full and complete understanding and agreement by and between the parties.  No other representations or promises have been made.  Both parties understand that this contract is a wholly integrated agreement.” This language appeared somewhere in the middle of the 4 page pre-printed form.

Just prior to signing the agreement, the employer made several promises to you, including but not limited to the following:

You will receive a year-end bonus each and every year that will be based on your performance

Your health insurance will be paid by the company after you complete your probationary period of six months

You will be reimbursed for auto expenses that you incur while using your car for business purposes.

The employer refused to honor ANY of the above oral promises and also fired you without cause. You sue the employer and attempt to introduce evidence of the oral promises. Your employer objects.

What are the legal arguments favoring your employer that if accepted by the court, would prevent you from introducing evidence of the promises?

What are the legal arguments that you would make to convince the court to allow you to introduce the oral promises?

Answer 1

Background Understanding of the related law and admissibility of evidence:

The parol evidence rule is a contract law doctrine that prevents parties to a written contract from presenting “extrinsic” evidence of terms in a contract that contradict, modify, or vary the terms of a written agreement, when that written agreement is considered complete and finalized.

The parol evidence rule applies only when a contract is completely finalized, or “integrated.” This means an unambiguous execution of the written agreement that leaves no doubt that the parties intended it to be the final contract. A complete integration captures the parties’ full and exclusive agreement on a contract matter.

(A)Legal arguments favoring your employer that if accepted by the court, would prevent you from introducing evidence of the promises

· The contract was a written agreement which was complete and finalized

· Contracts indicated by their own terms that they are intended to be final and complete agreements because of the wordings- “This document contains the full and complete understanding and agreement by and between the parties.  No other representations or promises have been made.  Both parties understand that this contract is a wholly integrated agreement.”

(B) Legal arguments that you would make to convince the court to allow you to introduce the oral promises

· An employment agreement can be said to be integrated only when it has all contractual provisions that would normally be expected of an employment agreement, such as employment length, employee salary, vacation time, health insurance coverage and other benefits- which was clearly not the case.

· A significant and very important paragraph about the final acceptance and wordings about the agreement being full and completed were placed strategically at apposition which would not come to notice- thereby making a attempt to fraudulently induce the party into the agreement

The fraud exception to the parol evidence rule is applied to prevent injustice and because these promises induced the employee to sign the written and finalized contract.