LAW 529 Lecture Notes - Lecture 3: Granite Real Estate, Kurdistan Regional Government, Severability
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Chapter 4: Written Employment Contracts
•Every employment relationship is based on a contract (oral or written).•Binding
contracts require: offer, acceptance and consideration (i.e. something given or promised
in exchange).•Advantages of well-drafted written contracts:– Reduces risk of
misunderstandings– Deals with contentious issues early– Reduces uncertainty•
Contractual terms:– Express Terms
– Implied Terms: What terms the parties would likely have agreed on,
but also what courts perceive the parties rights and obligations ought to be unless
expressly stated otherwise (e.g. reasonable notice of termination).
– If an employee says that the contract was not “implied” for a certain
task, then the employer is construcively dismissing that employee Enforceability
and Interpretation of Contracts1. Lack of Consideration:Typical
consideration in employment context is promise of work for promise of pay.What
happens if employee starts to work and the employer subsequently wants to
incorporate new terms without providing fresh consideration to the employee?
Francis v. Canadian Imperial Bank of CommerceEmployer has to finalize all
terms before employment starts OR provide fresh consideration (e.g. signing
bonus, extra $$$, etc.).2. Inequality of Bargaining Power:
Employee has to provide some clear evidence of special circumstances
beyond mere inequality in bargaining power (e.g. terms are unconscionable and
employee failed to understand them , etc.)
To avoid this claim, employers should provide employees with a
written copy of the contract, and a time to review and obtain independent legal
Employers should draw employees’ attention to key terms. 3.
When the terms of a contract no longer reflect the realities of an
employee’s position within the organization. Some examples from the courts
dealing with termination clauses.
Lyonde v. Canadian Acceptance Corp.: had been promoted from a
junior position to VP over 24 years.
Irrcher v. MI Developments Inc.: fundamental change in the nature of
his job since signing in 1990.
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