Court Enforces Unsigned Agreement

Early in 2019, we discussed the binding effect and enforcement of an unsigned agreement. This case again addresses this idea, although in a different setting, but also stands for the proposition that because the agreement did not “positively state that the parties could assent only by signing,” the unsigned (but agreed to) agreement in these circumstances would stand.

Here, a real estate broker in the midst of a two-year employment agreement reached an agreement with his employer to leave. The parties’ termination agreement was not signed by either party. Despite their agreement in principle, the employer refused to pay the employee certain commissions to which he claimed to be entitled post-departure. The court determined that the employer’s failure to pay breached the signed employment agreement and the unsigned termination agreement, both of which addressed the post-termination commission payments.

That the termination agreement was not signed did not sway the court. Initially, while the employment agreement specified that absent the parties’ execution it would not be effective, the termination agreement included no such provision. The court found this to be noteworthy as it demonstrated the employer’s understanding of this concept. The failure to include this same language in the termination agreement, as noted above, precluded the employer’s claims that it was not enforceable. Finally, the email chain between the parties evidenced their intention to be bound, even absent the signatures.

With these facts, the court held that the termination agreement was effective and enforceable.

Lerner v. Newmark & Co. Real Estate, Inc.