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Loren Vranich, a doctor practicing under the corporate name…

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Loren Vranich, a doctor practicing...
Loren Vranich, a doctor practicing under the corporate name Family Health Care, P.C., entered into a written employment contract to hire Dennis Winkel. The contract provided for an annual salary, insurance benefits, and other employment benefits. Another doctor, Dr. Quan, also practiced with Dr. Vranich. About nine months later, when Dr. Quan left the practice, Vranich and Winkel entered into an oral modification of their written contract whereby Winkel was to receive a higher salary and a profit-sharing bonus. During the next year, Winkel received the increased salary. However, a disagreement arose, and Winkel sued to recover the profit-sharing bonus. Under Montana law, a written contract can be altered only in writing or by an executed oral agreement. Dr. Vranich argued that the contract could not be enforced because it was not in writing. Does Winkel receive the profit-sharing bonus? Did Dr. Vranich act ethically in raising the defense that the contract was not in writing?
Submitted: 6 years ago.Category: Employment Law
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3/5/2012
Employment Lawyer: Roger, Lawyer replied 6 years ago
Roger
Roger, Lawyer
Category: Employment Law
Satisfied Customers: 31,949
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Hi - my name is XXXXX XXXXX I'm a Business litigation attorney here to assist you.

 

You're right that a contract in writing may be altered by a contract or by an executed oral agreement and not otherwise. Mont. Code Ann. § 28-2-1602. An oral agreement altering a written agreement is not an executed oral agreement within the statute authorizing modification of written contracts by an executed oral agreement unless its terms have been fully performed, and performance on one side is not sufficient. An executed contract is one where nothing remains to be done by either party. An executory contract is one in which a party binds himself to do or not to do a particular thing in the future.

 

For Winkel to be entitled to any profit-sharing bonus, the court must find the written employment agreement was altered by an executed oral agreement. Based on what is listed here, the oral agreement concerning profit-sharing bonus was never performed, thus the oral agreement was not executed.

 

Thus, Winkel should not be entitled to any profit-sharing bonus when Vranish terminated Winkel's employment.

 

No, Vranish didn't do anything unethical by claiming that the contract modification wasn't in writing. Vranish actually had a statutory right to do this.

Roger
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Employment Lawyer: Roger, Lawyer replied 6 years ago

One additional comment......

 

Vranish had a right to claim no modification was in writing, but that's only half of the requirement. Vranish also had to show that there was no fully executed oral agreement, which I discussed earlier, but I wanted it to be clear - the reason Vranish wins is because neither of these conditions were satisfied in this scenario.

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Customer reply replied 6 years ago
I have 3 more questions that I need help with. Would you be able to help? I'll raise the price if necessary . Thanks!
Employment Lawyer: Roger, Lawyer replied 6 years ago
I'll take a look at them.
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