Opinion Letter to Client - Sample Draft

Surabhi Kaura

Professor: Bernard Aron

Course Code: PLBA 354 (Advanced Legal Writing)

January 27, 2014


Source

Kauras & Kauras

Barristers & Solicitors

1199 Queens Street, Suite 299

Toronto, North York, ON M9N 1A1

Tel: (416) 123-321

e-mail: kauraslegalservices@gmail.com

__________________________________________________________

January 27, 2014



Moira Green

123 Appleyard Crescent

Wychwood, ON W3R E3N


Re: Employment Agreement with Sisley Brown


Dear Ms. Green:

Thank you for consulting with our law firm concerning the termination of your employment with Sisley Brown Car Dealership. In my letter, I will set out the facts as you provided them to me, the legal issues raised, a summary of those issues, and your options in regard to this dispute.

Facts

You were hired as a manager by Mr. Brown to manage his car dealership business. You negotiated with Mr. Brown an employment agreement which was drafted by his lawyer. Subsequently, you had your lawyer review the draft agreement. At the meeting to sign the agreement, you agreed to a few handwritten changes to the agreement which were not reviewed by your lawyer. After ten months, you were dismissed from your employment without cause, and a dispute arose whether you were entitled to one or two additional payments above your base salary. There was an ambiguity in the handwritten wording of the agreement relating to compensation upon termination of agreement.

The employment contract contained two clauses, both of which contain handwritten references to the sum “$15,000”. The following two provisions dealt with your compensation with the handwritten changes:

Paragraph 2 of the contract sets out a formula for your remuneration upon termination without just cause as being base salary plus $15,000. The “plus $15,000” was a handwritten addition.

Paragraph 8 of the contract sets out your bonus entitlements as being those calculated under the Manager Bonus Plan with the minimum annual guarantee of $15,000. The “minimum annual guarantee of $15,000” was again a handwritten addition.

You claim that you are entitled to your base salary plus $15,000, and a bonus calculated under the plan equal to $19,000. Your understanding of the contract is based on the discussion that took place just before the contract was signed. On the other hand, Mr. Brown maintains that your remuneration upon termination does not include the bonus because reference in Paragraph 8 to $15,000 was to the same entitlement as the reference to $15,000 in Paragraph 2.

Issues

Based upon the facts you provided, following are the two issues:

  1. The Parol Evidence Rule: The general rule is that the written contract is considered by the courts for its interpretation and verbal statements cannot be used as evidence to alter contract unless duress.
  2. The Doctrine of Contra Proferentum: According to this doctrine, if there is an ambiguity in a contract drafted by one party, then the terms of the contract with respect to ambiguity is interpreted against the party who drafted.

The Parol Evidence Rule: If there is an ambiguity, the court can consider and admit parol evidence to explain the terms of the contract. In your case, the two handwritten references to $15,000 have created an ambiguity. Mr. Brown maintains that the two references to $15,000 are to the same entitlement, whereas, you claim that both references to $15,000 are not with respect to bonus. Hence, the facts of your matter reveal that there is an ambiguity and court can admit parol evidence to ascertain the terms of the contract. For that, your handwritten notes at the time of execution of agreement and the negotiations which ensued between both of you can be taken into consideration by the court as extrinsic evidence to dispel the ambiguity.

The Doctrine of Contra Proferentum: In your case, the handwritten additions were made by Mr. Brown. Therefore, as per this doctrine, ambiguity can be interpreted against Mr. Brown. The main weakness of our case is that the dispute revolves on clauses that were themselves the result of last minute negotiations. This gives the contract an appearance of a freely negotiated agreement. However, we can rebut this argument by requiring the admission of parol evidence to prove that when the additions made by Mr. Brown, you were not accorded opportunity to have independent legal advice with respect to the handwritten changes. This doctrine is also applied where there is an inequality of bargaining power. Mr. Brown, in the capacity of employer, was more powerful than you when changes to the agreement were made. In this way, we shall satisfy the doctrine of contra proferentum.

Options

The following are the options available to you:

Court Action: You can initiate a court action by suing Mr. Brown to recover your bonus entitlements equal to $19,000. The advantages of court action are that if you succeed, you may get full recovery along with litigation expenses. You may also be entitled for the damages caused to you for the stress suffered due to additions made by Mr. Brown. The court will entertain extrinsic evidence into consideration to interpret the agreement. Furthermore, courts rely on precedents while rendering its decision on cases having similar facts. The disadvantages of court action are that litigation is expensive and may create imbalance to your financial position. The litigation process is quite lengthy, which may cause embarrassment. In addition, there is uncertainty with regard to the outcome of the case. Accordingly, these issues may increase stress and financial burden.

Alternative Dispute Resolution (ADR): During litigation, there is a mandatory ADR proceeding such as, mediation. The advantages of this option are that it is less expensive, it is a faster process in resolving disputes and you can choose your own mediator. The mediator does not impose or renders his decision on the parties, rather assists the parties in reaching at an amicable settlement. In addition, ADR proceedings are conducted privately and because of its private nature, it maintains confidentiality. The main disadvantage of this option is that ADR is not recommendable when there is a power imbalance between the parties. Furthermore, the mediator cannot interpret the provisions of the contract. This prerogative only lies with the court. In ADR proceedings, there is no adversarial system as court.

Take no action: You have already suffered mental distress from the dismissal of your employment. Litigation can aggravate your mental distress further. The advantage of taking no action is that you will suffer no expense. The disadvantage is that you will not be receiving what you believe you are owed.

If you want to proceed with court action or ADR, we shall require a retainer of $3,000. You will also be required to sign a retainer agreement and the scope of services will be set out. If you have any further queries or concern to confirm, please feel free to contact me at (416) 123-321 or at kauraslegalservices@gmail.com.

Yours truly,


Surabhi Kaura


~ Copyright © Surabhi Kaura 2014


More by this Author


Comments 2 comments

Steve 2 years ago

Ms. Kaura,

Thank you for writing this. It guided me to draw some ideas for contract related matters.

Steve


Surabhi Kaura profile image

Surabhi Kaura 2 years ago from Toronto, Canada Author

My pleasure! Glad to hear that.

    Sign in or sign up and post using a HubPages Network account.

    0 of 8192 characters used
    Post Comment

    No HTML is allowed in comments, but URLs will be hyperlinked. Comments are not for promoting your articles or other sites.


    Click to Rate This Article
    working