A friend of mine is about to change jobs, and following a couple weeks of negotiation by phone and email, she reached an agreement on the package with her new employer. Let’s say for the sake of illustration that they agreed on an annual gross salary of $60,000, which is $5,000 per month. She just received the employment contract from the new employer, already signed by them, which my friend now has to sign and return a copy.
The thing is, the employer made a mistake. Instead of stating her gross salary as $60,000 per year, they wrote $60,000 per month.
So I am just curious. If my friend does not tell the employer of their error, and signs the contract as is, can she later make a legal case for the much higher amount? A contract is a contract, right?
I am sure there is something in the law to protect people from errors like this, with the emphasis on intent, but would love to hear people think.
(to be clear, we are not planning of doing anything of the sort, and in fact my friend intends to tell the employer of their error and ask for a new draft of the contract. I am just curious)
I think this would count as a Unilateral Mistake. From the sound of it, if the error is so lopsided that a reasonable person would know that it was a mistake (which it seems like this is) the courts would not enforce the contract. I.e. the courts look unfavorably at people who think, “someone make a mistake – I’ll lock that in”, and this error is so egregious that it would be obvious that that is what happened.
Your friend will score big points by politely pointing out the error. And lose nothing - as already pointed out and common sense dictates, he’s not going to get that 12X salary (at least, not any longer than it takes to fire him to settle the matter).
I had a parallel issue happen recently, where the difference was much less egregious: $750 / month over the duration of the three-month contract, which had no guarantee of renewal anyway.
The salary was 150% of what they had planned to offer. I didn’t realize because I had only been quoted an hourly rate, and it was for a teaching job at a national multi-campus for-profit college. These are usually paid per course rather than per hour, and I had assumed by preparation and marking time would be compensated, so the figure seemed on the low side of reasonable to me, based on the hours I would actually work.
When the mistake was caught and explained to me, after the first day of class, I refused to sign a new contract at the lower figure. I was fired so fast it would make your head spin, even though it would cost the company more to replace me and hire someone new than it would have to eat the mistake.
In my case they invoked an at-will clause as the reason, but only because they couldn’t make the “reasonable person” argument available in the OP’s friend’s case.
A contract represents a meeting of the minds. No reasonable person would think the company actually meant to pay $720,000 per year. It’s an obvious mistake that would not be enforced.
A contract is an agreement, not necessarily in writing. The written document they send her to sign is not necessarily a contract itself. It may simply be a written memorialization of an already-existing agreement - here, the chain of e-mails reflecting whatever the actual arrangement was.
The key legal rule here is the doctrine of reformation. Where a written contract is inconsistent with the parties’ actual intent, a court sitting in equity will reform it to match. The employer would simply produce the chain of e-mails, or testify as to what was actually said.
thanks everyone for your thoughts. As I expected, this situation is covered by the law. But it was interesting to know exactly what the rules were.
But for those who said my friend would probably get fired for trying to pull something, you are of course right. However, they would still be required to give her one month paid notice, and at $60,000, that wouldn’t be bad
Nothing to add except that this type of mistake is sometimes called a “scrivener’s error” which is just legalese for “typo” but has a great ring to it.
Scriveners were the people who copied out contracts and other legal documents before mechanical reproduction. The immortal Bartleby for example.
Exactly. A contract is an agreement on both sides. If the written contract contained a typo, and obviously so, then the court will ask “what was the understanding on both sides?” It’s rarely a matter of “hah hah gotcha!” especially over $700,000.
There’s plenty of law too, I’m sure, on parties trying to sneak terms into writing that were not agreed to, plus on misinterpretation of the agreement from ambiguous wording. In all cases, it goes back to “what was the intent of the agreement”?
Presumably, for example, the two parties here have email or such going back and forth discussing the terms, including salary. That would be entered as evidence to show the judge what the two sides were intending. And so on…
