Ciaramella v. Reader's Digest Association
United States Court of Appeals for the Second Circuit
131 F.3d 320 (2d Cir. 1997)
During settlement negotiations in his employment discrimination suit, Ciaramella (plaintiff) and Reader's Digest Association (RDA) (defendant) exchanged drafts that each stated the agreement would not become effective until signed by all parties, plus a merger clause requiring any other promises to be in writing and signed. After requesting final changes, Ciaramella's attorney orally told RDA's attorney "We have a deal," but the final draft added a sample reference letter Ciaramella found unsatisfactory, leading him to refuse to sign. RDA moved to enforce the settlement as an oral agreement, and the district court granted the motion; Ciaramella appealed.
Whether, if parties intend not to be bound until an agreement is set forth in writing and signed, they may nonetheless be bound by an oral agreement.