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Posted: October 11, 2015

Court Refuses to Consider Extrinsic Evidence Regarding Terms of Employment Agreements

On September 30, 2015, Justice Singh of the New York County Commercial Division issued a decision in Auffarth v. Herald National Bank, 2015 NY Slip Op. 31839(U), holding that the parol evidence rule barred consideration of extrinsic evidence in interpreting employment agreements, explaining:

Whether the parties intended to be bound by a contract must be determined by an objective test and the inquiry as to such intent centers upon whether there was a meeting of the minds regarding the material terms of the transaction. Whether or not a writing is ambiguous is a question of law to be resolved by the courts. A familiar and eminently sensible proposition of law is that, when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms. Evidence outside the four comers of the document as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing. The use of parol evidence is admissible to clarify any ambiguity in what has been expressed. However, extrinsic and parol evidence is not admissible to create an ambiguity in a written agreement which is complete and clear and unambiguous upon its face.
. . .

[T]he offer letters memorialize[] the terms of the employment that were negotiated between the bank and each plaintiff. It is undisputed that both sides had extensive discussions about the terms of the agreement which culminated in the drawing up of the letters. The parties signed off on the letters after revisions. The court finds that the offer letters reflects a clear and unambiguous agreement between the parties and therefore, extrinsic evidence will not be considered.

(Internal quotations and citations omitted).

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