NSW Is Signed Letter Legally Binding Under Contract Law?

[texas ranger]

About 2 years ago, I was in the market for a house. At the time, we had just become permanent residents and my employer offered to help with the deposit for a house we wanted to buy.

After providing us with the money, I was asked to sign a letter that stated should I leave the company that the money would be payable in full. It also stated that I would be charged interest on the money. At the time, I questioned the interest and was told that this was for auditing purposes and that no interest would be charged. We had a witness in the room and were all in agreement

To date, I have not paid interest and periodically, I receive an email to say what has been deducted from the loan due to me paying it from my commissions. I realise that this was a fantastic gesture, however, at the moment I feel that this was a trap to keep me employed at the company.

My 1st question is that should I leave - there are no conditions of a payment period - could I be forced to pay the entire amount upfront?

My 2nd question is that should I leave, could I then be charged interest as this is what is on the signed letter even though there was a verbal agreement otherwise and I have not paid interest to date.

Is this letter actually legally binding under Contract Law?

Regards

 

[Rod]

1. Yes. Remaining balance only of course.
2. Maybe. Is there any mention of interest payable on the statements you periodically receive?
3. Yes, sounds like a legally binding letter. Could be a loan agreement or promissory note you signed. Different laws apply depending on which one is applicable to your situation. Either way, consider yourself legally bound.

 

[Sophea]

Hi texas ranger,

Yes, this would be legally binding and it sounds as though you would be at risk of having to pay the entire loan upfront if you leave the company. If your employer was to try to enforce the interest clause in the letter, this dispute would need to be determined by a court, which would be time-consuming and costly. However if you can prove the discussion that occurred at the time of entry into the contract you may be able to assert that the employer engaged in misleading or deceptive conduct by saying one thing and doing another with regard to interest.