FACTS: An example of the parol evidence rule playing out in an employment settin
ID: 364146 • Letter: F
Question
FACTS: An example of the parol evidence rule playing out in an employment setting was where a head coach contract became part of a legal dispute between West Virginia University and its former football coach, Rich Rodriguez. Rodriguez accepted a job at the University of Michigan four months after signing a two-year extension to coach at WV University. WV University sued Rodriguez at this point to recover $4 million under the buyout provision in its contract with the coach if he left before the end of the two years. In his answer to WV University's complaint, Rodriguez alleges that an oral promise was made to him in advance of signing the extension that the buyout clause would not be enforced if he left before the end of the two-year extension. QUESTIONS: Is the two-year extension required to be in writing under the statute of frauds? (explain) Do you think Rodriguez can use WV’s prior oral promise that the buyout clause would not be enforced as a defense to paying the 4 million? (explain) What if WV University had made the oral promise at the time of the contract signing? (explain) What if WV University had included the promise in an email sent prior to and not included in the final contract? (explain) What if WV University had included the promise in an email sent after the final contract was signed? (explain)
Explanation / Answer
Is the two-year extension required to be in writing under the statute of frauds?
Let us first consider what is statue of frauds. Statue of frauds is the requirement that certain contracts need to be in writing and signed by the person to be charged. It should also be signed by the witness. Contracts which are more than one year and has a definite period set needs to be signed by the party giving the contract, person accepting the contract and a person as a witness (evidence). In this case, the two-year extension should be written as per the statue of frauds.
Do you think Rodriguez can use WV’s prior oral promise that the buyout clause would not be enforced as a defense to paying the 4 million?
Since there is no evidence for WV’s prior oral promise about the $4 million as a buyout clause would not be enforced, Rodriguez cannot use it. A written documentation is the standing evidence for any defense. Since Rodriguez could not prove that WVU made an oral promise on the buyout clause, Rodriguez cannot use it as a defense.
What if WV University had made the oral promise at the time of the contract signing?
Whether WV University made the oral promise at the time of contract signing or before or after the contract signing, as per the statue of fraud any clause pertaining to the contract needs to be in writing. There is a probability that if Rodriguez left the job within 2 years, then WV University can sue Rodriguez to pay $4 million as a buyout clause and deny the oral promise. Hence, a written document acts as a proof on either party’s responsibilities.
What if WV University had included the promise in an email sent prior to and not included in the final contract?
If an e-mail or chain of e-mails clearly states that ‘WVU requires Rodriguez to pay $4 million as a buy-out clause if he leaves the job within 2 years’ would not be enforced if Rodriguez left within 2 years, and Rodriguez has replied acknowledging this promise, then Rodriguez can defend himself by using this as an evidence.
What if WV University had included the promise in an email sent after the final contract was signed?
Same as above scenario. An email is a valid contract if both parties have accepted the promise with the mention of all the legal terms and conditions eventhough they are not signed. The promise to not to execute the buyout clause was sent either before or after the signing of the contract, requires the mention of all the terms of the contract. Only then it can be considered as a valid contract and can be used to defend oneself. In this case Rodriguez.
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