SW Legal studies in Business

Statute of Frauds Bars Claim of Creation of Contract Obligation
Description Appeals court held that an employment agency that did not have a signed contract with an employer, but recommended various potential employees to the employer, did not have a claim for a commission when one person who had been recommended was later hired, as other recommendations had been involved.
Topic Contracts
Key Words Statute of Frauds; Oral Contract; Broker
C A S E   S U M M A R Y
Facts CCI, an employment agency, offered to provide job candidates for HHCC to consider hiring. Terms of the agreement were contained in information provided but no contract was signed. Lehrer's name was passed to HHCC by CCI in November. In January, Lehrer was recommended by an HHCC employee to HHCC. Lehrer was hired in February. CCI demanded payment for a commission based on her name having been passed to HHCC for consideration. The trial court dismissed the suit; CCI appealed.
Decision

Affirmed. CCI was a broker or finder who acts as an intermediary who brings parties together. Under the statute of frauds it had no claim against HHCC because there was no contract. One purpose of the statute of frauds is to discourage claims for commissions based on conversations that persons heard or remembered differently. The history of the relationship between CCI and HHCC indicates that CCI tried to sell its services, but HHCC did not commit. Lehrer's hiring appears to largely be due to the introduction she was given to HHCC by an existing employee, not CCI's earlier contact.

Citation Cantell v. Hill Holliday Connors Cosmopulos, Inc., 772 N.E.2d 1078 (App. Ct., Mass., 2002)

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