when you don't have a written agreement

To be sure, there are clear, tangible benefits to taking an active role regarding a contact's terms; indeed, that's why my normal "go-to" advice for clients is that they should try, as much as possible, to make sure that their agreements accurately reflect the parties' understandings of what their respective obligations are to each other, and thereby (hopefully) avoid and prevent misunderstandings down the road.

But there is a decided downside to it as well - particularly from the vantage point of the weaker party to the contract - which in the employment context, will almost always be the (prospective) employee.

Here's why:

The Reason Why Some Employees May be Better Off Leaving a Vague Contract Alone

In New York, like many other jurisdictions across the country, there is a legal doctrine called "contra proferentem," which means that to the extent any clause in a contract is unduly vague, the court is supposed to construe the meaning of that contractual term against the one who drafted it. In other words, in a dispute between the company and its employee where the company's attorneys drafted the agreement that is the subject of the lawsuit, the court is supposed to err on the side of the employee's reading in interpreting those contractual clauses that are unclear.

But this rule, like many, is not without limits. Here is one such caveat, as articulated by one of New York's appellate courts at the end of last year:

"While plaintiff is correct that the doctrine applies “ ‘against the party who prepared [the contract], and favorably to a party who had no voice in the selection of its language’ ” (Coliseum Towers Assoc. v. County of Nassau, 2 A.D.3d 562, 565, 769 N.Y.S.2d 293 [2d Dept. 2003], lv denied 2 N.Y.3d 707, 781 N.Y.S.2d 289, 814 N.E.2d 461 [2004]), the doctrine is inapplicable where the record establishes that both parties participated in negotiating the terms of the contract (see id.)." (Emphasis supplied).

Kowalak v. Keystone Med. Servs. of New York, P.C., 197 A.D.3d 893, 895, 153 N.Y.S.3d 297, 300 (4th Dept. 2021).

The Takeaway

At the end of the day - at least in my view - it most circumstances the general advice of trying to make sure that everyone is on the same proverbial page at the outset of a professional relationship still holds true. But that doesn't mean you shouldn't go in with your eyes wide open, and be tacitly aware of the risks involved in taking an active role in trying to modify and negotiate the contract's terms.

Jonathan Cooper
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Non-Compete, Trade Secret and School Negligence Lawyer
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