In re Arbitration between Acadia Company & Irving Edlitz

Brief Fact Summary. Respondent Edlitz was employed by appellant Acadia Company pursuant to agreement. The parties agreed orally to renew the contract and extend the respondent’s term of employment by six months. After respondent’s employment was terminated, a dispute arose as to whether the contract was breached.

Synopsis of Rule of Law. Orally renewing the written agreement adopted the written agreement as an integral part of the new arrangement, modified only by an extension of time of employment.

Facts. The appellant, pursuant to a written agreement, employed the respondent. Said agreement provided for arbitration of “any question, difference or controversy [arising] as to the interpretation or performance of any of the foregoing provisions.” Prior to the expiration of the written agreement, the parties orally renewed the agreement, and the respondent’s employment was extended by six months. The respondent’s employment was subsequently terminated, and a dispute arose over whether the contract had been breached.

Issue. Should the appellant’s motion to compel arbitration be granted?

Held. Yes. When the parties orally renewed the written agreement, they effectively adopted it as an integral part of the new arrangement, which was modified only by an extension of the period of employment. Since the written agreement contained an arbitration clause, the motion to compel arbitration shall be granted.

Discussion. Orally renewing a written agreement has the effect of adopting the essential terms of the former written agreement.