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LAW 529 (123)
Chapter 4

CHAPTER 4.docx

3 Pages

Law and Business
Course Code
LAW 529
Peter Wilson

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Chapter 4 ▯ The Employment Contract Three things are necessary to create a contract: 1. An offer 2. Acceptance 3. Consideration (something given or promised in exchange) (EX: job offer, acceptance, and promise of wages in exchange for work) ADVANTAGES OF WRITTEN EMPLOYMENT CONTRACTS 1. Reduces risk of misunderstandings a. It can always be referred to  2. Addresses contentious issues early a. Likely to be dealt with in a constructive manner 3. Reduces uncertainty  a. Clear record of the terms and conditions of employment IMPLIED TERMS Where the issue was not addressed in an oral contract, or was left out of the written  contract, a court imports implied terms. It considered terms the parties would have likely  agreed on.  ISSUES WITH WRITTEN CONTRACTS 1. Lack of consideration a. If there is a GRATUITOUS promise, you cannot sue. b. Problems arise if the employee beings to work before the contract is  finalizes. Employee may argue that the contract signed after is  unenforceable because there is no new consideration c. Must provide new consideration such as a signing bonus 2. Inequality of bargaining power a. Cant be unreasonably one sided b. Must be a reasonable balance c. Give employee time to read written copy d. Draw their attention to key terms 3. Obsolescence a. This happens when the terms of the contract no longer affect the  employees position in the organization  b. Update whenever there is a promotion  c. State that contract applies despite any changes over the life of it  4. Failure to meet minimum statutory standards 5. Use ambiguous language: Contra Proferentem Rule a. Ambiguous language may be interpreted against the party who drafted  agreement because they could have been clearer.  b. APPLY MODY FAVORABLE TERM TO THE EMPLOYEE  • Use clear language • Be fair when negotiating • Give other party time to read, understand, and seek legal advice • Meet or exceed min statutory standards • Bring critical term to applicant attention • Provide consideration if employer wants a new term included after contract  begins • Customize contract  PARTS OF A WRITTEN CONTRACT 1. Job description a. Job duties b. Entitled to refuse to do duties outside of original agreement 2. Remuneration a. Match statutory minimum b. No obligation to provide future pay increases 3. Term a. Otherwise, it is considered indefinite  b. Negotiate fair termination provision
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