Brief Fact Summary.
An employment contract contained a condition precedent requiring written notice be provided to the company within 30 days after a claim by the employee arose. Additionally, an employee could not initiate a suit "prior to six (6) months after the filing of the written notice of claim." An employee did not comply with the requisite notice provisions
Synopsis of Rule of Law.
Public policy is not offended if a written notice of a claim is a condition precedent to recovery.
Any provision of any contract or agreement, express or implied, stipulating for notice or demand other than such as may be provided by law, as a condition precedent to establish any claim, demand, or liability, shall be null and void.View Full Point of Law
The Plaintiff, Inman (the "Plaintiff"), worked for the Defendant, Clyde Hall Drilling Co. (the "Defendant"). The Plaintiff signed an employment contract with the Defendant on November 16, 1959. The contract required the Plaintiff to give written notice of a claim against the company within thirty days after any claim arose. The contract also included a provision forbidding the initiation of a suit "prior to six (6) months after the filing of the written notice of claim." The Plaintiff was terminated by the Defendant on March 24, 1960. The Plaintiff brought suit alleging that the Defendant fired him without justification, which constituted a breach of contract. The lower court enforced the notice provision, which the Plaintiff did not abide by, and the Plaintiff appealed.
Is the "provision in the contract, making written notice of a claim a condition precedent to recovery, contrary to public policy"?
No, the contractual provision at issue is not unfair or unreasonable. The court recognized "a court will not permit itself to be used as an instrument of inequity and injustice." In other words, the court will not enforce unconscionable agreements. In determining whether a contract is enforceable the court "must look realistically at the relative bargaining positions of the parties in the framework of contemporary business practices and commercial life." The court observes that the purpose of the notice provision is not specified in the contract. However, there is nothing in the contract suggesting "it was designed from an unfair motive to bilk employees out of wages or other compensation justly due them." There is no indication the Plaintiff was not smart enough to read the agreement and understand it. In fact, in his deposition the Plaintiff stated that he talked with a company representative about the agreement and also read the agreement before he signed it. Also in his deposition, the Plaintiff made specific reference to the 30 day provision. Additionally, there is no indication the Plaintiff did not have a choice about the terms of the contract. Finally, there is no evidence the parties had substantially unequal bargaining positions.
· The court refused to equate the filing of the Plaintiff's complaint with the notice requirement set forth in the contract, finding they were entirely different from one another. This is clearly supported by the clause in the contract saying a suit cannot be instituted "prior to six(6) moths after the filing of the written notice of claim." Being that notice is a valid condition precedent, the Plaintiff does not have a claim.
It is important to recognize that this issue is very fact intensive, xand if the purposes for the notice requirement were less sincere it may not be valid.