Verbal promises can’t overwrite ‘entire agreement’ clause

Executive claimed company broke promises made during takeover negotiations
|Canadian Employment Law Today|Last Updated: 10/04/2011

Verbal statements made to an executive can’t overrule a written employment contract that states it is the entire employment agreement, the Ontario Superior Court of Justice has ruled.

Thomas McNeely joined Herbal Magic, a weight loss management company based in Toronto, as a senior executive in January 2004. Two years later, Herbal Magic was acquired by Torquest Partners Fund and a new company, Herbal Magic Inc., was created. McNeely was actively involved in the negotiations for the acquisition.

During the negotiations, Brent Belzberg, the head of Torquest, told McNeely it wanted to keep him with the new company and would not turn around and get rid of him a few months later. Torquest also said it would not buy Herbal Magic without McNeely as part of the package and Belzberg wanted McNeely to be the president and CEO after the acquisition.