Verbal Offer: Legally Binding?
Thanks for the replies to my last couple of threads. Now, in all seriousness, I got a call from a firm who offered me a summer position. No documents signed yet, but when the HR asked if I'd accept the offer, I said currently I would love to.
To be honest, I'm still waiting for another firm to get back to me. Is an oral acceptance legally binding? I don't want to get screwed. I mean I haven't gone through the formalities and haven't even seen the terms and conditions regarding this position.
Anyone?
We have this thing called the 13th amendment, so no acceptance- verbal or written- is legally binding. But it can get you kicked out of OCR if you accept at one place and renege for another. And you'll probably never work for that firm again.
If this is MS vs. JPM, just go with MS. If this is Citi IBD vs. some no-name boutique, ok, fine, renege on the boutique.
Thanks. Awesomely helpful!
No name boutique > Citi IBD
Love the new avatar, IP.
OK, Illini, that is not completely correct. The 13th Amendment (abolition of slavery) has nothing to do with whether or not a contract is legally binding (it really addresses the issue of no-contract, non-voluntary labor). As to the poster's question, it is highly unlikely that your verbal acceptance can be construed as binding. This is determined on a state-by-state basis except under certain conditions which I believe apply to your case. Because HR is speaking to you about future employment, this is a contract that must be in writing to be enforceable (otherwise, claim they promised to pay you $100M). They need to give terms of employment (wages, restrictions, company policies, termination protocols, etc.) to demonstrate that you fully agreed. Basically, what HR asked you, in stronger term was: "Should we send you a Terms of Employment contract?"
But, even if the verbal acceptance were legally binding, you can renege on the contract. In contracts, there are usually some terms that dictate what are the consequences of ending an agreement. Since none of that was provided to you, based on what you have written, there are effectively no consequences to reneging. Two things, though: 1) Obviously, you should avoid doing this whenever possible; and (somewhat contradictory) 2) You don't owe them anything- you are the only person you can trust that is looking out for you.
Thanks, rls. That's basically what I've figured.
lol at the 13th amendment. If you want to get nerdy about it, yes a verbal agreement can be binding and you are technically liable for any detrimental reliance (e.g. if they spent any kind of money on you based on the fact that they heard your acceptance)... But realistically this is all moot. All you stand to lose is this offer if you tell them you are still waiting.
On a personal level, if you really want to hold out for the other firm just have a chat with the boutique and tell them you spoke too soon out of excitement and that given the time you spent on it, it makes sense to wait out the other firm.
For those laughing about the 13th amendment, the case law for this is Bailey v. Alabama:
http://en.wikipedia.org/wiki/Bailey_v._Alabama
:D
also, I believe that usually your employment is "at-will" by either party
More like laughing at your argument. Case is legit but it has no application here. No one is going to force OP to work for this boutique, he could (theoretically) get sued, the worst thing (realistic) that can happen is that he has no job as a result.
Shrug it doesn't change the fact that nobody is going to sue you, and it doesn't change the fact that the 13th amendment has significant implications for employment law.
Okay, I know this since I've studied it extensively.
1) Verbal offers are generally held to be legally enforceable contracts. A contract, though, is a promise exchanged for a promise. So if I say "hey, I promise to give you my calculator if you promise to give me your iPod" and the other person says "Sure!," that's a legally enforceable contract. Whoever brought up the 13th amendment is totally off base. 2) Your verbal offer wasn't really an offer. You don't know the full terms of the offer. The "offer" was merely them letting you know that they'll be making you a proper offer in the coming days. 3) Your "acceptance" of that offer is not an acceptance of an offer, it's an invitation for them to make you a proper offer. 4) The Statue of Frauds has been enacted in all 50 states as part of the UCC, the Uniform Commercial Code, which has been passed in 49 states (with the exception of Louisiana since they have a civil law tradition and not a common law tradition). The SoF governs contracts that must be in writing: these include contracts that cannot be performed in one year (although those of indefinite duration are counted), contracts in consideration of marriage, land contracts, contracts that involve the sale of goods for more than $500 or purchase of goods for more than $5000, etc.
Now, your contract, if a time frame is specified (three years of work for the analyst program), would have to be in writing. If it didn't specify a time period, it would not have to be in writing. However, keep in mind that many contracts themselves stipulate that they can change the offer whenever they want to before the start date if economic conditions change, etc. But theoretically, if the contract were stipulated a certain way, it could be legally binding for both of you. But in this case, you'd have to sign it. So it wouldn't be counted as reneging.
As a side note, Illinois passed a "defense of promises" act a few years ago that covered marriage, meaning it took marriage outside of the UCC. A woman sued her ex-fiance because she said he broke a legal contract by not marrying her. She had a ring, dinner receipts, wedding plans, as evidence of a promise they made to each other to get married and stated it was a legal contract. She won in court and received a hefty sum.
Good post. But this shit makes me so angry, what the fuck is wrong with people (read: women)!!
Illini, I understand what you are getting at, but I have two points:
First, I would disagree with the Supreme Court that indentured servitude is not allowed under the 13th Amendment. Indentured servitude may have a bad name, but it has rules and is used to pay off a debt. The servant is being compensated- the money is going to pay a senior secured debt holder. It is not a form of slavery, i.e. non-voluntary labor, which is what the 13th Amendment addresses. If you prepay someone to work, they should either give you the money back or performed the agreed-upon work. If the former is not possible, then the latter should be enforced if the contract includes that provision- even that, in my book, isn't indentured servitude- that's just executing an agreement. Of course, that isn't exactly as Bailey v. Alabama case went, but you get my drift.
Secondly, I don't, think that Supreme Court case is relevant because the question, in my understanding, was asking if the means of agreement (verbal) constituted grounds for a legal binding. With respect to that, I don't think that case or the 13th Amendment applies.
Thanks bros. Don't think they would sue me but better to be cautious.
can we get advice from any one who has been in this situation :D
i have same problem as op thankfully :)
don't want to ruin my reputation both firms are good
but i'm not stupid enough to believe they would sue me .....more of a if you were in my shoes
1) Absolutely no need to get into contract law, constitutional rights, etc. This is EMPLOYMENT AT WILL, folks. Can reneg on any contract verbal or written at any time. Similarly, the firm can cancel/fire you at any time (of course, excluding discriminatory reasons).
2) Personally, I would never accept a verbal offer and then go back on it. You never know what bridges you're burning. Moreover, recruiting on the street is a surprising small community (a lot of HR recruiting ladies are friends with each other, worked together at some point, talk, etc.).
3) And yes, I can speak from personal experience: 1) turned down an offer from the first place I interviewed at (without any other offers - but did have ~10 or so interviews lined up); the BB's hadn't started yet 2) accepted one BB offer (think CS/ML/BarCap) only to receive another one a few weeks later (i.e., GS/MS/JPM). No regrets. As a broad generalization, if you're at a top 5 BB, you will get good transaction experience (depends on group too), and if you are at the top of your class and interview with the headhunters well, you will have plenty of exit opps.
Advice: Call the other firm. Say you have an exploding offer and if they have any updates on the process/timing/etc. Good luck
Oh I understand Employment at Will, I was just pointing out whether this would technically not be called 'reneging' if he said on the phone "Yay I'd love to work for you!" and then backed out later. Sure he has a legal right to renege, but a lot of schools have policies against it. At ND you get reported and you're deactivated from OCR if you renege (so if you renege, you'd better have another offer lined up!)
been in a similar situation, worked in ops at a BB as a summer intern. They offered me a full time offer to continue, didn't want it but accepted it anyway because I couldn't graduate unemployed (had student debt, etc). Kept looking for a front office job, ended up getting a S&T job at a boutique firm in november (After accepting ops job in september & signing my contract). Called the BB, told them I quit, and then put the other paper work through.
The important thing to remember is that I have never seen an employment contract for a new analyst (i have now recieved 4, 2 BB's and 2 Boutiques) that doesn't include some type of the following terminology..."we reserve the right to fire you for no reason at any time and you reserve the right to terminate your employment here at any time". Paraphrased of course, also, you haven't even gotten the contract yet, so you are 100 percent in no way, binded to basically your saying that you want them to send you a contract.
Overall, its not binding. I would not recommend renegging for similar positions, but if the one position you are holding out for in your view is better and holds significant advantages than the other (as in my case), just call once you get it and be honest and quit. Following the advice of someone else's comment, dont be a complete idiot and quit MS ibanking for JPM or GS ibanking. People hop around at these firms too often, especially BBs and it is not worth it in the long run.
Goodluck, congrats, hope this helps.
It's almost assuredly at will employment; hence, they can drop you without a moment's notice, for virtually any reason besides you being black, pregnant, or both.
Don't hold yourself to a higher legal standard than they hold themselves. You need to look out for Number One, because no one else is going to. That said, be smart about it. As Illini said, there's really no appreciable difference between JPM and MS, and I would go so far as to argue than reneging on BAML for Goldman would still be a bit silly; however, if one job is going to significantly alter the arch of your career (for the better, of course), then why wouldn't you go with it?
what are the firms blatoise bro and gratz on the offers
Illinois programmer gets owned ITT
Reneging verbal offers? (Originally Posted: 01/18/2016)
Hi, was wondering if anyone has advice on how to deal with this situation. Received a verbal offer today for SA from a BB, but still have three interviews coming up in the next two weeks with other banks that I'm considering. Problem is the BB is pressuring me for a verbal yes/no over the phone by tomorrow. I asked when I would receive the official offer documents and they said they would send them after I verbally accept.
I would definitely want to work for them, but I also like the other banks I'm interviewing with and want to be able to weigh all my options. Would it be super terrible to verbally accept and potentially renege later before actually signing any offer?
Was browsing older posts about the seriousness of reneging on a verbal commitment and saw all kinds of responses ranging from "NBD people do it all the time" to "you will get blacklisted by every bank on the Street, cut off from school OCR, and have your firstborn child sold into slavery"
Just turn the tables on this one. Tell them that you're very interested in the firm and its your top choice, but you want the opportunity to see the offer in writing so that you know the terms and that you're absolutely sure about what you're signing up for. This is called "making an informed, adult decision".
This is more or less a "if we gave you an offer, would you accept" interview question, and the answer to give is always yes.
You also have no idea how those other interviews will go. An SA stint at a BB will set you up well for full-time recruiting regardless of which BB you're at. Given the volatile and unexpected nature of all the variables that go into getting an offer, I'd take what you have and run with it.
If I were you, I'd do what I suggested and try to get away without committing (i.e. "I'm really excited at the opportunity, and just want to make sure that this is the best thing for me"). If push comes to shove, commit verbally and then see how the other interviews pan out before signing
This sounds like a high-pressure sales tactic to me. I agree, ask to get the offer in writing first and be sure to express interest. Hopefully this buys you a few days. You can also be candid and explain to the other firms that you have an offer and will need to commit soon - hopefully at least one or two can push your interview up a bit.
Just FYI, this isn't really tactic but rather more of an industry standard. Many banks won't send you physical offer letters unless you say yes first.
Yes, but no one has ever told me that I must decide by the next day. The process makes sense, the abbreviated time for a response does not. At least not in my experience.
Accept the offer, be thankful you GOT an offer, and do everything humanly possible to get a FT offer. I don't understand the mentality of kids nowadays. You have an IBD offer from a BB, one which obviously wants you, and wants you to commit.
You have absolutely nothing to gain, and everything to lose, by trying to play it slick with them. They have seen the suggested sophmorish tactics a million times over, and it will earn you no goodwill.
I definitely not trying to be arrogant or ungrateful. I know that it's a great opportunity and the only thing stopping me from signing right away is that the offer is for non-NYC, and my longer-term goal is to end up in NYC for FT IBD, so I'm concerned about potentially having trouble networking for FT in NYC if I spend my summer thousands of miles away. My three upcoming SA interviews are for banks in NYC which is why I want to keep them on the table. If my current offer was for NYC I would already have signed it 100%.
We do this all the time. Usually it happens for cusp candidates / in January because alot of banks are doing rolling SA superdays so they're running out of slots so they want to give you an offer and lock you down. Otherwise the slots is in limbo waiting for you and they can't move down the preferred list to another candidate.
If it's a matter of a few days I'd tell them but if its longer you could very well lose your slot. You're probably a 3/4 candidate that's why.
Also to the other people that say you won't get an actual offer. Physical offer vs offer are two different things.
For candidates we really like we send an email and say your offer will be in the mail if you accept (saves processing costs b/c the offer packet takes some time to put together - its not just one piece of paper).
For candidates on the cusp, you get a call and say you have an offer IF you accept but you get nothing in writing.
Not sure which one you are but that's the two routes we usually take.
I'm at a target and this bank recruited on campus. My school has a policy that the earliest deadline employers can set for accepting SA offers is the last week of February, but obviously I don't want to piss off people I might be working for by demanding a month to decide.
This sounds pretty similar to my situation. One of my concerns was definitely that I might lose my slot if I didn't pull the trigger.
On the other hand, the bank seemed very anxious to lock me down. Two people called me separately, and I told them both that I was almost certain I wanted to work for them but wanted to see the actual offer before committing 100%. One person responded by saying "I put you down as verbally accepted," which seems a little shady because that's not really what I said.
I guess it's too late - how did this end up.
It's not a matter of being professional. It's also giving other people a shot. We have a quota and have other people to notify
gave verbal acceptance to offer, but... (Originally Posted: 07/17/2007)
i recently verbally accepted an offer for a fairly reputable bank, but may have an even better opportunity at a bulge bracket. should i go back on my word or maintain my integrity? currently, i am pretty sure i will be doing the latter.
Make the appropriate business decision.
If the opportunity at the BB is better and a sure thing (but you said "maybe"?), then take it.
If those at the smaller bank are worth their salt, they will understand that you have to do what's best for you.
----However, I would only decide against the smaller bank once you have the BB in the bag. Can you wait for that?
Good luck.
yes i probably can wait for that. the BB is being very accommodating. i.e. moved up their time table by weeks. i am just not sure i should break my word when all is said and done.
Cain
Do not worry about breaking your word. My friend recently accepted a job offer from another bank, signed the contract and returned to their HR dept. Circumstances changed and he ended up staying with his current employer. He just rang up the HR dept and told them that he is rescinding on the contract. This sort of thing happens all the time so don't worry about it.
your employ. is at will, since the bank can fire u anytime u can quit anytime. dont be loyal to any1 but urself.
go with the better opportunity. no hesitation.
This is gospel. Remember your low on the totem pole in the grand scheme of things, the bank won't be that 'hurt' from any point of view by your decision.
Good luck.
It's okay to rescind in your circumstance b/c you're junior. As you move up the ladder in your career, acceptance followed by rescinding only compromises your integrity in relationship to how senior you may be. Going forward, just work on trying to become more judicious before making a definitive decision. It's good practice.
I too value integrity above all things, thus the reason I am not a banker. Your decision however, should fall within the Darwinistic framework and you shouldn't worry about taking the better offer at the risk of breaking your word.
noble. what do you do junkbondswap?
He's in Sales!
Quite surprised he's not a banker, actually - he's made some very knowledgable points on these boards...
wow, i did not expect this many response in terms of pro-breaking my word. but some of you make a great point!
I am currently a second year PE analyst but am fascinated by the banking lifestyle and all of the personalities involved.
I am not in sales; although if I were that wouldnt be such a terrible thing despite your perception of sales as being represented by the dregs of society. ha
I would probably choose sales/trading over IBD if for no other reason than the hours/lifestyle and relative compensation.
As far as breaking your work...get over it, you act like you are breaking your vows to your wife or reneging on your father's last wishes. Stop taking life so seriously and do what is best for you. As an analyst you would be nothing more than a drone or an automaton anyway; the bank can and will replace you.
I was in your position a few months ago. Was offered a job on the spot at a boutique, and when the MD asked if I would accept I said yes. Then I got home and checked my email, and saw that I was invited for a final round at a BB. I called the BB and asked if I could interview ASAP, and was able to the next day. I let the BB know that I had an offer, and needed to know their decision right away. I ended up getting that job after the interviews were done.
I emailed the MD at the boutique and let him know that I was considering another offer that had just come up. He told me to call the senior partner (who I had also interviewed with). I was pretty scared, but he actually listened to my situation and told me that I should go with the BB offer, as it would be better for my career. Point is, I was thinking the same thing as you (didn't want to reneg on the verbal offer), but the senior partner at the boutique was more than understanding.
If you had integrity you wouldn't have asked the question in the first place.
integrity and stupidity are not the same.
spot on jimbo
thanks for all the constructive inputs guys, i got the bb. gave me the job on the spot. i am taking it.
what was the other bank's reaction to your decision?
“However long we postpone it, we eventually lie down alone in that notoriously uncomfortable bed, the one we make ourselves. Whether or not we sleep in it depends, of course, on whether or not we respect ourselves.†-- Joan Didion, On Morality
i like the quote, but work in the industry a few years and you will not have qualms about these sorts of things
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