The NJ Supreme Court says a plaintiff could sue because he relied on a withdrawn job offer. If you quit one job to get another, perhaps even arranging a move closer to this new job, and the offer is then withdrawn, you may have a valid basis to file a lawsuit to recover your losses.

Broken Promises, Not Breached Contract, the Basis of Lawsuit

Jed Goldfarb is an investment research analyst who gives investment advice. He claims that David Solimine offered him a job managing his family’s investments. Neither the job offer nor the terms of employment were in writing, but Goldfarb left a well-paying job, relying on Solimine’s verbal job offer, and started giving him investment advice. Solimine later told Goldfarb he changed his mind and wouldn’t employ him. Goldfarb sued and obtained a judgment in his favor on a promissory estoppel claim. This allowed him to receive damages for what he hadn’t received from Solimine because he relied on Solimine’s words to his detriment.

The defendant claimed the lawsuit should be dismissed because of the state Uniform Securities Law. It states that any investment advisory contract needs to be in writing. Solimine argued since there was no legally binding contract between the parties, it couldn’t be breached, so there shouldn’t be a lawsuit. The trial court disagreed. It stated Goldfarb relied upon Solimine’s broken oral promises.The trial court ruled Goldfarb’s damages would be what he would’ve made if he worked for Solimine.

Solimine appealed the trial court’s decision on the promissory estoppel claim. Goldfarb also appealed the decision about his damages.Goldfarb contended he should be paid what he would’ve earned if he had stayed at his old job, as if he never met Solimine. Goldfarb argued he shouldn’t get “expectation” damages or “benefit-of-the-bargain” damages but “reliance damages” instead. This might not have been out of a sense of right and wrong. Goldfarb’s former employer paid him more than what Solimine offered, so that would increase Goldfarb’s recovery.

New Jersey State Supreme Court Finds Defendant Liable for Retracted but Relied Upon Job Offer

The part of the law’s provision against verbal contract claims states no one who makes or complies with a contract that violates the law can base any suit “on the contract.” The New Jersey Supreme Court looked at the “on the contract” phrase and reasoned that since Goldfarb’s promissory estoppel claim was not a contract claim, it wasn’t based “on the contract,” so it was a valid lawsuit.The High Court saw the issue as the violation of a legally binding promise of a job, not whether a contract was violated. Since Goldfarb relied on Solimine’s promise and suffered as a result, a promise that otherwise wouldn’t be legally enforceable could be the basis of a lawsuit. Promissory estoppel can be a legal claim whether or not there is a contract. Under state law, such a claim is established when there is:

•  A clear and definite promise;
• Made expecting the other party to rely on it;
• The other party’s reliance was reasonable; and
• The other party suffered a definite and substantial harm

The jury found Goldfarb proved these elements and ruled Solimine was liable for promissory estoppel under New Jersey employment law. The Supreme Court ruled the trial judge made the right decision to allow the claim and the jury’s decision was proper.

How Should the Plaintiff be “Made Whole”?

The Supreme Court also held that the correct way to measure Goldfarb’s promissory estoppel damages was “reliance damages,” or what he would’ve earned if he stayed at his prior job, looking backward. Damages awarded in a breach of contract claim are expectation damages, what money would’ve been earned working for Solimine, looking forward.Since there was no contract, Goldfarb’s damages shouldn’t be those awarded for a contract claim. A  claim provides relief to put a plaintiff in the same position he would have been in, if the promise had not been made and broken. The case was sent back to the trial court to properly determine the plaintiff’s damages.

Lay the Foundation of a Legal Claim in Case You Need to Make One

If you’re looking for a job, if this situation happens to you, you need to protect yourself. Lawsuits not only rely on legal rulings like those of the New Jersey Supreme Court, but also on facts that trial courts use to make decisions.If you’re involved in job negotiations where you and a potential employer are going back and forth in conversations, take notes. Use those notes to write follow-up emails to the other side. If things go well and you’re hired, use those notes and emails to make sure you’re getting what’s been promised.New Jersey also permits one party consent to record a conversation, even by hidden means. Other states require two-party consent, but New Jersey’s rule is a boon to employees who want to prove their claims – but sometimes to employers who want to prove their defenses.If the job offer falls apart and you relied upon it by quitting a job you couldn’t get back, like Goldfarb you may have a promissory estoppel claim. In this case, he was in a line of work that, by statute, required a written contract. What you do probably does not. The conversations between you and your potential employer may have created an enforceable, unwritten, oral contract, or, by your actions, there may be a binding implied contract.To form a contract:

• One side must make an offer and the other must accept it;
• Each side gives up something of value (known as consideration);
• There’s a “meeting of the minds” (the two parties understand what they’re agreeing to); and
• The contract terms are reasonably certainAn implied contract is an agreement shown by the parties’ actions or the circumstances of their relationship.To have a valid breach of contract claim, generally, you must show:
• A contract binds the parties;
• The plaintiff did what was required;
• The defendant materially breaches the agreement contract by failing to do what the contract required it to do; and
• The breach harmed the plaintiffIf you file a promissory estoppel or breach of contract claim, the defendant may claim there’s not enough evidence to prove your case. Detailed, well-written, accurate notes and emails or an audible audio, can help you make these claims. The quantity and quality of your paper and audio trail can make a big difference.

How Kingston Law Group Will Help You

If you think you have a case of promissory estoppel or feel you’ve suffered because of a breached contract, contact us for a near-term, reduced rate initial consultation. It will be protected by social distancing and masks, on Zoom, or on the phone. Call or write us online. We take credit cards and have general appointments from 9 a.m. to 5:30 p.m., Monday through Friday, plus evening appointments during the week by pre-arrangement only. Call today. You’ll be glad you did.