Snowcone, Inc., a manufacturer of air conditioners, hired Mike as Sales Manager for its Southeastern Region. The parties entered into a three-year employment agreement under which Mike was to be paid a salary of $100,000 per year, plus bonuses. Because Snowcone’s attorney was cautious by nature, the contract included a provision stating:
This agreement represents the complete and entire agreement of the parties. It may be modified only by an agreement in writing, signed by both of the parties. THE EMPLOYEE AGREES THAT HE WILL NOT EVEN CONSIDER THE POSSIBLIITY THAT THIS CONTRACT COULD BE MODIFIED ORALLY.
Because Mike’s management of the Southeastern Region was very successful in the first year of the contract, and because Snowcone’s president had become convinced that global warming had created an opportunity to market air conditioners in new areas, the president and Mike orally agree, at the beginning of the second year, that Mike will become Sales Manager for Snowcone’s newly formed Inuit Region, while continuing to manage the Southeastern Region. His base salary will be increased to $150,000.
Mike works tirelessly in his new sales territory, and even invents a special adapter to assist in mounting air conditioners on the curved walls of igloos. Every week, Snowcone pays Mike his increased salary. Some months later, Snowcone’s president sends Mike an email asking how he likes his additional responsibilities and his new salary.
Unfortunately, seasonal temperatures soon return to the Arctic and the sale of air conditioners to the Inuit fails to meet expectations. Snowcone eliminates the Inuit Region and informs Mike that his salary will be reduced to its original $100,000 level. Mike objects, claiming that the parties orally modified his employment contract to increase his salary. He sues Snowcone. Snowcone defends on the basis that the employment contract could not be modified orally, citing the express provision allowing modification only by a writing signed by both parties. Is Mike out of luck? No.
Even where a contract contains a provision requiring that modifications be in writing, an oral modification is enforceable if there is sufficient proof of the modification. In Cambridgeport Savings Bank v. Boersner, 413 Mass. 432 (1992), the Massachusetts Supreme Judicial Court recognized that a contract could be modified orally despite a provision requiring that modifications be in writing. The Court stated:
Additionally, a provision that an agreement may not be amended orally but only by a written instrument does not necessarily bar oral modification of the contract. “Mutual agreement on modification of the requirement of a writing may … ‘be inferred from the conduct of the parties and from the attendant circumstances’ of the instant case.”
Id. at 439. To establish an oral modification of a contract requiring that modification be written, the evidence of a subsequent oral modification must be of sufficient force to overcome the presumption that the integrated and complete agreement, which requires written consent to modification, expresses the intent of the parties. See also Beal Bank S.S.B. v. Krock, 187 F.3d 621, 1998 WL 1085807, *3 (1st Cir. 9/3/98) (Unpublished); Galvin v. Excel Switching Corp., 21 Mass. L. Rptr. 233, 2006 WL 1719922 (Mass.Super. 2006); Tomer v. Hollister Associates, Inc., 20 Mass. L. Rptr. 487, 2006 WL 463953, *5 (Mass. Super. 2006); Orix Credit Alliance, Inc. v. Strong Equipment Co., Inc., 10 Mass. L. Rptr. 54, 1999 WL 281095, *2 (Mass. Super. 1999); Berry v. City of Worcester, 1998 WL 1181727, *8 (Mass. Super. 1998).
Whether there is the required mutual assent to the modification is a question of fact. Here, Mike can show that Snowcone made him Sales Manager for the Inuit Region, thereby increasing his job responsibilities, that he performed the extra work, and that Snowcone paid him for doing so, all in accordance with the oral modification. He also can introduce the email in which the company president makes reference to Mike’s increased salary. Therefore, Mike is likely to be able to prove that the parties entered into an oral agreement and that they intended to modify the original employment contract.