I. REVIEW

II. HUMAN RESOURCE MGMT I Elements of contract Provisions of employment contract

III. WRAP-UP

WAIVER

Signed by participants before activity If legally effective, participants’ negligence

claims against your organization will be dismissed by court

Against public policy (courts hate it!)

AGREEMENTS TO PARTICIPATE

Signed by participants before activity It must clearly explain

Nature of activity & danger Eligibility to participate (e.g., physical condition)

Not negate liability but helps defensive position

ELEMENTS OF CONTRACT: TO BE LEGALLY ENFORCEABLE, A CONTRACT MUST HAVE ALL FOUR

Offer Acceptance Consideration No defense

ELEMENTS OF CONTRACT: OFFER

Precatory terms: Not enough to become an offer “We’d like to have you here … Would be here if all

your concerns can be accommodated?” “We will be extremely happy if we can work together”

Clear enough: An offer “You will work from 9:00 a.m. to 5:00 p.m. Monday-

Friday, starting from next week … Your base salary is 35K not including performance bonus and employee benefits”

“You can work at home … The weekly compensation is commensurate with your performance, which is 5% commission on every sales agreement you would make”

ELEMENTS OF CONTRACT: ACCEPTANCE

Acceptance: Must accept entire offer as given

Additional term: Not acceptance but becomes a counter offer

Offer counteroffer acceptance Offer: “9-5 Monday-Friday, $1800.00

biweekly, no employee benefits except mandated by law”

Counteroffer: “OK … But I cannot work on Monday … Can I work on Saturday instead of Monday?”

Acceptance: “OK. Deal!”

ELEMENTS OF CONTRACT: CONSIDERATION

Promise to perform in a contract must be “bargained for”

No consideration: Not legally obliged to perform

“I will work for you because I like you” “I will give you free golf lessons every Saturday

morning” Consideration (“bargained for” promise): Must

keep the promise legally “I will work for your company for $500/week” “I will give you golf lessons every Saturday for

25/hour”

ELEMENTS OF CONTRACT: NO DEFENSE

There must not be a reason for which court would strike down the contract

Examples Contract made under duress No contract Contract term enforced against a minor No

contract Contract for performing an illegal activity

No contract

PROMISSORY ESTOPPEL: EXCEPTION TO REQUIREMENT OF CONSIDERATION

Agreement w/o consideration enforceable if A reliance is reasonably expected when it

was made In fact, there was a reliance The party relied upon has damage

Examples: If plaintiff can prove above three, the promisor must perform what he promised

PROVISIONS: REASSIGNMENT

Employers would loves to have & exercise this

Monson v. State of Oregon

Fact: A football coach was assigned to golf team under a state regulation (incorporated to contract)

Rule: Any reassignment under a valid contract is enforceable

PROVISIONS: COMPENSATION

Compensation includes not only salary but also “perks” (Examples)

Golf club membership Housing Transportation Spouse benefits

You must draft this provision very carefully

PROVISIONS: TERMS OF EMPLOYMENT

How long the work period will be (e.g., # of years)

Must be in writing if more than 365 days Rollover clause

After X years, automatically renewed year by year

Unless one party notifies not to renew Convenient but “lame duck” problem

PROVISIONS: TERMINATION

Termination for just cause EE breached the contract Morals clause: How to justify?

Termination without cause ER just fire EE without breach Legal action: “Wrongful termination” Good practice: “Buyout” provision w/

liquidated DMG

PROVISIONS: COVENANT NOT TO COMPETE

Generally disfavored unless it is written very specifically

Limited geographical region Definite & reasonable length of time period Example: Director of Nike Reebok (1 yr)

PROVISIONS: COVENANT NOT TO COMPETE

Northeastern v. Brown

Fact: ER’s consent required for football coach’s move

Rule: Injunctive relief is possible in addition to liquidated damage if “willful & intentional breach”

Court awarded more than usual

PROVISIONS: BUYOUT CLAUSE

If one party breaches the contract the breaching party must pay a lump sum $$$

Examples “If any party breaches any provision in this

contract, it will pay the aggrieved party 300,000”

“A party must pay 10 million the other if it terminates any provision in this contract prior to the end of the current contract term”

PROVISIONS: EMPLOYMENT AT WILL

Terminated at anytime, w or w/o cause, by employer or employee

Types of “at will” employment If contract explicitly provides that it is “at

will” If no term provided in contract If no written contract at all (= implied

contract)

FORMATION OF CONTRACT

Offer Acceptance Consideration No defense against contract’s

enforceability

ENFORCEABILITY OF CONTRACT

Promissory estoppel: Contract w/o consideration still enforceable for justice if

A reliance is reasonably expected when it was made

In fact, there was a reliance The party relied upon has damage

EMPLOYMENT CONTRACT: PROVISIONS

Reassignment Compensation Terms of employment Termination & liquidated damage Covenant not to compete Employment at will