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NJ Justice Jaynee LaVecchia NJ Justice Jaynee LaVecchia

It is axiomatic that forming an employment contract, just like any other contract, requires the elements of offer, acceptance and consideration and, thereafter, if there is a breach after performance, the injured party is entitled to expectation damages. It is also true that there is an exception to the paradigm and that reasonable reliance can provide an exception for lack of consideration and thereafter the injured party is entitled to reliance damages.

In Jed Goldfarb v. David Solimine, the New Jersey Supreme Court recently held that a disappointed prospective new hire could proceed with his claim for reliance damages against the soliciting employer despite a prohibition against a “suit on the contract,” as provided in N.J.S.A. 49:3-71(h) if the Securities Act has been violated. New Jersey’s Securities Law prohibits dishonest and unethical practices and the Bureau of Securities in its administrative code has included entering into an investment advisory contract, including Goldfarb’s, unless such contract is in writing and discloses material terms, including fees and details about the discretionary power granted to the investment advisor. Plaintiff had no written contract.

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