Lipsit v. Leonard
Supreme Court of New Jersey
315 A.2d 25 (N.J. 1974)
Leonard (plaintiff) was employed by Lipsit (defendant). The written employment contract stated that a more permanent relationship between the two involving an equity interest in the business for Leonard may be developed and put into effect later. Leonard claimed that the contract came with an oral promise—which induced him to leave his previous job and then continue working for Lipsit—that he would eventually be given that equity interest in consideration of his continued employment. Eventually, Lipsit made a proposal to Leonard that did not make economic sense for him. Leonard rejected the proposal and soon after was fired. Leonard brought suit for the tort of fraud, claiming that Lipsit never intended to make good his promise of giving Leonard an equity interest, which amounted to a misrepresentation, and fraud in his inducement of Leonard to continue working for him. (Leonard also brought suit for breach of contract, but this cause of action was properly dismissed because there was no enforceable contract involving the equity interest, as the parol evidence rule barred the alleged oral promises Lipsit made to Leonard). The trial court awarded summary judgment to Lipsit and the appellate court affirmed. Leonard appealed.
Rule of Law
Holding and Reasoning (Per Curiam)
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