Employment Contracts-Unexpected Questions and Variable Answers

8/20/2019 Employment Contracts-Unexpected Questions and Variable Answers

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EMPLOYMENT CONTRACTS:(Unexpected) Questions

and (Variable) Answers

Michael Moffa

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Employment Contracts: Cautions, (Unexpected) Questions and (Variable) Answers

By Michael Moffa

The following report is to be regarded as a limited commentary on, (meta-)analysis of and

collection of suggestions regarding "expert" legal advice and opinion on employment contracts,

but not as expert legal advice itself. For investigation, determination or resolution of any issue

related to employment contracts, consult with law professionals.

Yesterday, you read the employment contract, orally accepted the job offer, and shook handswhile effusively and repeatedly sputtering "Thank you!", but, as yet,you haven't signed anything.Today, you are stunned to see that the Wall Street Journal has revealed an Enron-sized scandal

and horrible 3rd-quarter revenues at the company; suddenly, the allure of the signing bonus andthe value of the stock options that made the package so sweet are, like the stock itself, goingsour and south.

Now, you want out. But, are you legally obliged to take that job and pass up a solid offer thatyou were going to pass up, even though you haven't signed the contract in hand? Conversely,despite the company's problems, is the employer legally obliged to hire you? Overnight, the

job's potential has become much less obvious than its pitfalls, triggering questions you neverimagined asking or having to ask.

Just one example like this is sufficient to demonstrate that, when you are offered (or offer) anemployment contract, what can matter much more than the answers to your questions are theanswers to questions you haven't even thought of and never imagined having to ask, much lessdid ask.

With rarely imagined as well as frequently asked questions in mind, the following employmentcontract Q&A supplements where it does not go beyond a typical FAQ, and includes an "IAQ"—

a list of "infrequently asked questions" (and maybe some that although never asked should be,whether or not there is a clear and pat answer).

This combined FAQ and IAQ ranges from the most general to the most specific questions, withthe more general, such as those regarding the essential elements of a contract, also being themost fundamental and comprehensive, while the more specific are the more "exotic", yetpotentially just as important.

Of particular importance are those questions that, although very important, may have noobvious, clear or consistent answer, despite the weighty consequences, however they are

answered. Such questions can serve as a warning to forestall or obviate the need to ask them

by making sure the circumstances warranting the questions never arise or that one is otherwiseprepared for their emergence as issues.

For example, suppose an HR manager, attempting to describe the job, tells a candidate that"you will have your own office and three weeks of paid vacation". Can the candidate respondwith, "Agreed!" or, even better, an acceptance email, and thereby commit the manager to not

only hiring him, but also to providing those perks? (As a minimum, there is a serious risk ofmisunderstanding and even perhaps subsequent litigation.)


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Prima facie, this appears to be tricky, because the manager said "will", not "would". No matterwhat the law eventually says about this scenario, the risks could be eliminated merely by addingone question to an IAQ:

"Is a description, forecast or explanation of a contract's terms ever a prima facie or binding

offer?"

Precisely because the answer may not be known at the moment the question becomesgermane, it may be extremely prudent to ensure nothing is said or done to prompt the question,e.g.,to prevent it by always saying "would", never "will" .

Note that this example of a "will" vs. "would" contract confusion and its consequences is notpurely theoretical. In explaining contract law, the University of Hong Kong Community LegalInformation Centre states that:

"An offer is an expression of readiness to do something which, if followed by the unconditional

acceptance of another person (see item (iii)), results in a contract. For example, if a company

tells you that it will sell you 100 boxes of red wine at the price of $100,000, that company is

making you an offer." [Underlining added for emphasis.]

By this standard, the HR manager might be unconditionally obligated to provide the candidatethat office and assistant (in addition to the job) once the candidate says, "Agreed!" or "I accept!",even though the manager imagined that he was only describing, forecasting or explaining whatthe job would provide, rather than offering it.

That this issue is one that is and should very broadly be taken seriously is further illustrated bythis analysis at Findlaw.com:

"Many states also recognize that a verbal statement by an employer, such as 'you'll be here as

long as your sales are above budget,' may create a binding contract of employment. The

enforceability of such verbal contracts is limited, however, by a legal doctrine known as the

'statute of frauds,' which provides that any verbal agreement that cannot be carried out in less

than one year is invalid. So, in the above example, because the employee conceivably could

have fallen below budget and been fired within one year, the agreement would be enforceable,

even if the employee was not actually fired. A verbal contract must also be specific in order to

be enforceable. A statement such as 'You'll have a job here as long as you like' generally will not

be enforced." [Source: http://employment.findlaw.com/hiring-process/employment-contracts-

and-compensation-agreements.html.]

Clearly, it is important to specifically ask and find out whether such careless oral representations

can constitute a binding offer (upon acceptance), apart from the broader question of whetherpurely oral acceptance will in many, if not all, other instances be likewise binding (which is anissue discussed below). Better still, don't be so careless.

A Check List to Check Out

http://employment.findlaw.com/hiring-process/employment-contracts-and-compensation-agreements.htmlhttp://employment.findlaw.com/hiring-process/employment-contracts-and-compensation-agreements.htmlhttp://www.hkclic.org/en/topics/businessAndCommerce/setting_up_business_in_Hong_Kong/making_a_business_contract/q1.shtmlhttp://www.hkclic.org/en/topics/businessAndCommerce/setting_up_business_in_Hong_Kong/making_a_business_contract/q1.shtml


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Many of the questions in the list to follow are "check-list" questions, e.g., does the contract

contain "(but not) limited to" or "termination without notice or cause" clauses? These check-listquestions will serve as "look for" or "watch out for" contract "flag" elements, i.e., items andconsiderations that at least one or only one party wants or should want included, modified or

clarified in the contract, or otherwise excluded from or prohibited by it. It is to be assumed thatthe more specific the questions, the longer the checklist of them. For the purposes of this report,the listed questions, although all germane to employment contract pitfalls, is to be regarded asillustrative rather than comprehensive.

The point of these check-list questions is primarily not to provide law-stamped airtight answers(which do, can or probably will vary from one national or regional jurisdiction to another), but to

alert contracting parties to risks and opportunities while reviewing an offer and contract prior tosigning. Of particular importance are definitions, items and clauses of the contract that, withrespect to the law, contravene it, are required, are permitted or are/are not otherwise negotiableor deletable.

Special attention should be paid to the contract "glossary" and other governing definitions,which are very precise, sometime idiosyncratic definitions more likely to be only glanced at, to

ensure that both parties understand precisely the who, what, when, where, with what authorityand limitations, how, how long and with what benefits and costs the contract will be exectuted.

For example, to answer the question "Must the employer provide an employment contract?" , adefinition of "employment contract" must be specified for the context—especially the jurisdiction—in question. Do you imagine that a "written statement of employment particulars (terms andconditions of employment)" is a contract? At least some experts in the U.K. declare that the

answer is "no":

"There is no legal requirement to provide a contract of employment. Under the Employment

Rights Act employees must be provided a written statement of employment particulars (termsand conditions of employment)...The initial statement of employment particulars must be

provided no later than two months after their employment begins." [Source: ms-solicitors.co.uk.]

This differentiation between "employment contract" and "written statement of employmentparticulars" is confirmed on the official Gov.UK website:

"An employer must give employees a ‘written statement of employment particulars’ if their

employment contract lasts at least a month or more. This isn’t an employment contract but will

include the main conditions of employment." [Underlining added as emphasis.]

On this interpretation, a "written statement of employment particulars (terms and conditions ofemployment") most definitely is not an employment contract. Yet, the same Gov.UK website

specifies that:

"Although it might not be in writing, all employees have a contract of employment...A contract of

employment is an agreement between an employer and an employee which sets out their

employment rights, responsibilities and duties. These are called the 'terms' of the contract...Your

employment contract doesn’t have to be in writing, but you’re entitled to a written statement of

http://www.nidirect.gov.uk/contracts-of-employment-an-introductionhttp://www.nidirect.gov.uk/contracts-of-employment-an-introductionhttps://www.gov.uk/employment-contracts-and-conditions/written-statement-of-employment-particularshttps://www.gov.uk/employment-contracts-and-conditions/written-statement-of-employment-particularshttp://www.ms-solicitors.co.uk/employer/employment-contract-advice/faqs-common-employment-law-questions/%233http://www.ms-solicitors.co.uk/employer/employment-contract-advice/faqs-common-employment-law-questions/%233


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the main terms within two months of starting work.The employment contract is made as soon as

you accept a job offer...If you're an employee, you automatically have a contract of employmentas soon as you accept a job offer."

On the face of it, and as grounds for the kind of caution advised above, this is all very confusing.First of all, this contradicts not only the abovementioned claim that "there is no legal requirement

to provide a contract of employment", but also the claim that a "written statement of terms andconditions" is not an employment contract. Or is an "agreement" to be construed as being

different from a "written statement"? (This, again, raises the issue of the form of a contract(written agreement) vs. the force of a contract (signed agreement).)

Exacerbating the confusion is that the distinction, insisted upon elsewhere in contract literature,between mere "agreements" and "contracts" seems to be collapsed or ignored. (More onagreements vs. contracts below.)

As a general caution to be heeded, close attention should be paid to whether, in any giveninstance, context or locale, entering into an "agreement" or more colloquially, "agreeing",translates into agreement to merely undertake consideration or negotiation of an offer and

acceptance or, instead, amounts to (binding) performance of offer and acceptance.

Legal technicalities aside, given the vagueness and ambiguity of "agreement", "agree" and

"agree to __" (where the force of the blank can vary dramatically as between and among nounsand verbs), great care should be taken in articulating and interpreting such expressions ofagreement. Of great importance is the difference between the parties to a contract "agreeing on" and "agreeing to" the terms (and conditions, when "conditions" is not redundant). (For more

on this, see the discussion on what the term "terms" means, below.) It is, therefore, wise to notconfuse them during contract talks.

Reinforcing the prudence of such caution is this New Zealand legal perspective:

"It is often hard to prove that an employer and intending employee had actually reached an

agreement, rather than had just been discussing a possible agreement." [Source: http://www.lawspot.org.nz/employment-law/once-a-verbal-employment-agreement-has-been-made-is-this-legally.] (This seems to assume that "reaching an agreement" implies forming a bindingcontract, as opposed to agreement to preliminarily consider, evaluate or negotiate.)

Second, on the Gov.UK formulation and interpretation of contracts, an employment contract isaccepted and binding upon acceptance of a job offer, although not legally required for

employment (an exemption that would obviously make sense in instances of self-employment).

How, then, is it possible that acceptance of a job offer is required to get the job, without entailing

the creation and acceptance of the associated employment contract that is "made" uponacceptance? The notion that, upon acceptance of the job offer, a job candidate automatically has an employment contract that is nonetheless not a legal requirement for getting the job (eventhough formal acceptance is required to get the job) is mystifying (assuming that the various

authoritative sources of the information are indeed "authoritative", where they are not self-contradictory).

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It must be noted, even though generally understood, that acceptance of a job offer is, undercontract law, by itself not sufficient to create a contract.

Other essential contract elements, whose precise formulation varies, must be confirmed:

!"Capacity": Being officially authorized, of legal age, or mentally or otherwise fit to enter acontract; excluded, regulated or limited in some circumstances. In Australia, for example, those

who are formally bankrupt or incarcerated are two among the regulated categories.

!"Consent" : Sometimes confusingly equated or conflated with "assent", "agreement" or

"intention", this means formally and "freely" agreeing to consider the contract terms andconditions, e.g., without intimidation or coercion. In some scenarios, deemed incapacity ,including because of being under-aged, will preclude consent , suggesting an intimaterelationship between the ostensibly two distinct factors of consent and capacity (as well as

consent vs. acceptance, discussed below).

!" Offer": Presumed or imagined offer does not qualify as binding, although an "implied" offer

("implied in law" or "implied in fact") may. Ideally, an offer will be explicit and made through aspecified and authorized channel, e.g., letter or text message addressed to the hiring manager.Great care must be taken to understand what does or does not (or at least what is likely or

unlikely) to count as an "implied offer" in any given instance and locale. The difference between"implied in law" and "implied in fact" is significant: The former means that, even without assent,a legally enforceable duty to perform exists, whereas a valid and binding contract that is "impliedin fact" is characterized by assent that, accordingly, creates the duty. This distinction applies to

acceptance as well as to offer."Any offer must consist of a statement of present intent to enter a contract; a definite proposal

that is certain in its terms; and communication of the offer to the identified, prospective offeree.

If any of these elements are missing, there is no offer to form the basis of a contract.?" [Source:http://legal-dictionary.thefreedictionary.com/implied+contracts.]

If, through inadvertence, an offer is extended a job candidate, e.g., through a failure to realizethat one is making an unintended job offer that is nonetheless implied by law, the candidate mayseek legal redress for non-performance after acceptance.

As Freedictionary.com explains, "Contracts implied in law (quasi-contracts) are distinguishable

in that they are not predicated on the assent of the parties, but, rather, exist regardless of

assent." (Note the use of "assent" here as a preliminary to a comparison of "assent" and

"consent", below.)

One apparent complication is that, according to the same source,

"The courts may not create a contract for the parties. When the parties have no express or

implied agreement on the essential terms of a contract, there is no contract."

Since this appears to contradict the fundamental assumption underlying implied-in-law contracts—namely, that "they are not predicated on the assent of the parties", the best advice regarding

http://legal-dictionary.thefreedictionary.com/implied+contractshttp://legal-dictionary.thefreedictionary.com/implied+contractshttp://study.com/academy/lesson/expressed-vs-implied-contracts-differences-examples.html


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such cases is to seek a second, third or fourth opinion, especially when the lack of express or

implied agreement on a contract's "essential terms" is limited to one or two conditions orwarranties.

For offers implied by fact (e.g., behaviors that strongly evidence employer assent and intent tomake an offer before or after acceptance), the candidate nonetheless denied the job will havean even stronger case.

!"Consideration" : Both parties must gain something of estimable value (even if only $1 or apromise to refrain from doing something), to ensure that the contract is of mutual, rather thanone-sided, benefit. Consideration may be some right, interest or benefit provided one party by

the terms of the contract or some forbearance, detriment, loss or responsibility given, sufferedor undertaken by the other party.

In addition to variable emphasis on "consent" vs. "intention", there is also frequently explicit

formulation of a requirement of "lawfulness" (e.g., that nothing in the contract requires criminalbehavior) and reference to "agreement":

"The requisites for formation of a legal contract are an offer, an acceptance, competent parties

who have the legal capacity to contract, lawful subject matter, mutuality of agreement,

consideration, mutuality of obligation, and, if required under the Statute of Frauds, a

writing." [Source: http://legal-dictionary.thefreedictionary.com/implied+contracts]On some formulations, "certainty of terms" is added.

Even when these elements appear to be present, as requirements they may in some instances

not be met, e.g., when there have been mistakes (e.g., in offering a job that, unbeknownst toeither party, has been filled or with a company that has gone out of business), false statements,"undue influence" or other factors impacting consent, capacity and consideration. So-called

"innocent misrepresentation", "negligent misrpresentation" and "fraudulent misrepresentation" can impact the validity and force of any contract in various and often unpredictable ways.

On the other hand, there is, outside the U.K., commonplace acceptance of the contrarydefinition, e.g., U.S. and Canada-based lawdepot.com describes such terms and conditions ofemployment as, indeed, an employment contract (at least in form, prior to being signed and inforce):

"An Employment Contract is a contract (either written or verbal) which sets out the terms and

conditions for employment between an employee and an employer." [Source: http://

wiki.lawdepot.com/wiki/Employment_Contract_FAQ_-_United_States.] (Note: "of employment"

is regarded as synonymous with "for employement" for the purpose of this citation.)

A huge red flag or at least a confusion raised by the U.K. characterization is that, with respect todocumentation, there is no mention of job candidates', employees' or the employer's having tosign anything. Is being presented a "written statement" sufficient to constitute legal and binding(or at least prima facie or implied) acceptance of the terms and conditions it contains just

because receipt of the statement has been consented to and accepted? That would be like

http://wiki.lawdepot.com/wiki/Employment_Contract_FAQ_-_United_Stateshttp://wiki.lawdepot.com/wiki/Employment_Contract_FAQ_-_United_Stateshttp://www.lawhandbook.org.au/handbook/ch12s01s02.phphttp://www.lawhandbook.org.au/handbook/ch12s01s02.phphttp://www.thisismoney.co.uk/money/experts/article-2715470/Is-employment-contract-binding-I-never-actually-signed-It-says-I-three-month-notice-period-never-signed-I-respect-it.htmlhttp://www.thisismoney.co.uk/money/experts/article-2715470/Is-employment-contract-binding-I-never-actually-signed-It-says-I-three-month-notice-period-never-signed-I-respect-it.htmlhttp://legal-dictionary.thefreedictionary.com/Statute+of+Fraudshttp://legal-dictionary.thefreedictionary.com/Statute+of+Frauds


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regarding acceptance of a traffic violation summons as admission of culpability or waiver of any

right to dispute the charge.

Moreover, if the foregoing quoted characterization of the "written statement" is accepted at face

value, in the U.K. employees may have to wait a full two months to find out what the terms andconditions of their jobs are, without obvious or at least consistent and uniform assurances thatthey enjoy the legal protections of an "employment contract" as understood in other

jurisdictions.

The general lesson and caution to be extracted from these semantic differences andinconsistencies is that, when offering or being offered a job, parties to the hiring need to confirm

their understanding of the documentation, their oral and other behavioral agreements (such asan affirmative nod) and their legal backdrop and implications, prerequisites, force, etc.,especially if the prospective employee is an expat (e.g., in or from the U.K.) coming from orarriving at a jurisdiction with different laws, concepts, standards, etc.

It may also be prudent to seek more than one "expert" opinion to ensure that there is indeed aconsensus, if not universal interpretation of the law, allowable employer practices and job-

candidate rights. Plentiful disagreements and self-contradictions among them strongly suggestthat perhaps the first question to ask when asking an employment contract-related question is,"Can I trust this source of the answer?" Sources cited within this report include some that

individually or collectively serve more as warrants for caution than as archives ofincontrovertible answers.

The List

With the bare essentials of an employment contract examined and serving as a backdrop, therest of the checklist can come into play:

" What are the differences between an employment agreement and an employment

contract?

Getting clear on this can be, as a challenge, a nightmare. Consider the following tableostensibly outlining the difference between them:

Agreement Contract

Definition An arrangement (usuallyinformal) between two ormore parties that is notenforceable by law.

A formal arrangementbetween two or more partythat, by its terms andelements, is enforceable bylaw.

Validity based on Mutual acceptance by both(or all) parties involved.

Mutual acceptance by both(or all) parties involved.


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[Source: http://www.diffen.com/difference/Agreement_vs_Contract.]

The problem with this explanation is that if the agreement is not legally enforceable, in what

sense and with what point can it be, as asserted, "valid"? (See the discussion of "valid" vs."enforceable" contracts, below.) And how can there be the implied difference between

agreements that lack any of the required elements of a contract and those that have them all,when none of them is "enforceable by law", and how can any agreement have any "legal effect"

if it is unenforceable?

Moreover, other experts characterize contracts as enforceable agreements, e.g., when the

contract, as an agreement, is lawful, valid and binding. Indeed, the consensus seems to be thatcontracts are a form of agreement; so, how, then, can it be categorically claimed thatagreements are not enforceable when valid and binding contracts are?

As for any differences among an "agreed", "prima facie", "valid", "legal", "void", "voidable","binding" and "enforceable" contract, that can be an equally daunting semantic excercise. For

example, the wikipedia entry (of uncertain authorship) for "Unenforceable" asserts that:

"An unenforceable contract or transaction is one that is valid, but which the court will not

enforce."

Yet, one NYU law school posting seems to deny the unenforceability of a valid contract:

“There is a difference between morally enforceable (it’s mean not to do it) and legally

enforceable ([the] state will to resort to force to fulfill) agreements. Valid contracts are the

second kind. Case law tells us what is legally enforceable and what is not."

What can make this confusing is that joint discussions of valid and unenforceable contractsusually focus on "otherwise valid" contracts and then proceed to show that at least one of theessential elements of a valid contract is missing, e.g., capacity or consent. That's very different

from the question of whether a truly valid contract might nonetheless be unenforceable. (For alist of various ways in which an "otherwise valid" contract may be unenforceable, click here.)

Bottom line: the concept that is initially most important for parties to an employment contract isthat of an "enforceable" contract, since none of the others, such as "valid", will matter much if

Does it need to be inwriting?

No. No, except for some specifickinds of contracts, such asthose involving land or whichcannot be completed withinone year.

Consideration required No. Yes.

Legal effect An agreement that lacks anyof the required elements of acontract has no legal effect.

A contract is legally bindingand its terms may beenforceable in a court of law.

http://www.nolo.com/legal-encyclopedia/unenforceable-contracts-tips-33079.htmlhttp://www.nolo.com/legal-encyclopedia/unenforceable-contracts-tips-33079.htmlhttp://www.diffen.com/difference/Agreement_vs_Contracthttp://www.diffen.com/difference/Agreement_vs_Contract


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the contract and compliance with its terms or penalties for breach cannot be imposed and

enforced. Nonetheless, these other notions, e.g., "voidable", are indeed relevant to contractsthat are in force and enforceable, but not yet "executed", i.e., not yet completed with respect toperformance of its terms).

Clearly, when entering an "agreement:" with an employer or a job candidate, it is imperative thatat least both parties are proceeding with compatible concepts of agreement and not with aconcept that under the laws (of "implied by law" quasi-contracts) may bind either or both of them

prematurely or against their wishes.

! What are the most general necessary and sufficient conditions for an employment

contract to be valid and therefore binding? (Are "valid" and "binding" the same

thing?)

These are both easy and tricky to specify. As is the case with most things, "the Devil is in the

details."

In the most general terms, as noted above, and as a sub-type of contract, an employment

contract is governed by the established standards for a valid contract under contract law. andmust meet the aforementioned requirements of capacity, consent (or, instead, as the Universityof Hong Kong Community Legal Information Centre specifies, "intention"), consideration, offer

and acceptance. Contrary to one misconception, performed offer and acceptance are notsufficient to create an enforceable (employment) contract. As a minimum, the contract must belawful, i.e., not contain promises to do anything illegal.

One conceptual and practical issue that can arise—especially between parties who are notlawyers—is that of distinguishing "consent" from "acceptance", since, in daily life, consenting tosomething entails accepting it (without requiring accepting it as an additional step).

Although these are universally identified as distinct core prerequisites of a contract, meticulouslyand unambiguously distinguishing them conceptually, commonsensically and in legal practice

can be challenging and very confusing.

For example, given that "consent", "assent" and "acceptance" are commonly conflated orpeculiarly distinguished from each other, consider this characterization of "assent" at

Freedictionary.com:

"An intentional approval of known facts that are offered by another for acceptance; agreement;

consent. Express assent is manifest confirmation of a position for approval. Implied assent is

that which the law presumes to exist because the conduct of the parties demonstrates theirintentions. Mutual assent, sometimes called the meeting of the minds of the parties, is the

reciprocal agreement of each party to accept all the terms and conditions in a

contract." (Underlining added for emphasis.)

As conceptual or practical guidance, this is not very helpful, since it inconsistently or unclearly

characterizes "assent" as being:

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" 1. A form of "approval of known facts" : Which means what?--that the facts are

"liked", or "accepted", i.e., recognized, as true? What about assent to proposals, which,by definition, are not themselves facts, even though there are facts about proposals? Arethey not subject to assent/consent/agreement?

In general usage, we "assent" to purported facts and factual claims, i.e., acknowledgethem as actually true and correct. On the other hand, "consent" designates granting

permission for certain things to be done. We do not "consent" to facts. Therefore, within

the ambit of an employment contract, these are and should be recognized as two distinctelements: assenting to alleged matters of fact, e.g., that the address and the employerare indeed as identified in the contract, and consenting to proposed actions, standards,

conditions, etc.

Hence, if either assent or consent are withheld or otherwise lacking, the contract shouldnot be able to come into force. Of course, in signing or otherwise orally, gesturally or in

writing, accepting a contract, a signatory will be undertstood to prima facie confirm bothassent and consent. Moreover, assent to what turns out to be false (especially if willfulmisrepresentation) may, independently of any issue of consent, provide grounds for

voiding a contract.

However, distinguishing assent from consent still leaves the issue of distinguishing them

from acceptance (not to mention "agreement"), bearing in mind that acceptance of thecontract facts through assent neither implies or constitutes consent to be bound by acontract's provisions nor demonstrates acceptance of the offer (to the extent thatconsent and acceptance are distinguished).

" 2. "Confirmation of a position" : Is this confirmation that something is in fact theposition taken, or is it acceptance of a position, akin to congressional confirmation of a

nominee? If it is the latter, then the line between assent and consent is again blurred,without addressing the nature of contractual, binding acceptance.

" 3. "Agreement to accept" : How is this different from pure and simple acceptance as"agreement with or to" the contract conditions and warranties, unless "acceptance" isdefined in terms of a subsequent formal, performance-based and behavioral step, suchas signing, rather than some "mental" step?

Operationalizing express "acceptance" is, of course, necessary and useful, but becauseof possible confusion with "consent" and contract participant uncertainty about the

difference, great care must be taken to ensure that there is no misunderstanding, e.g.,

that one party, when asked for consent, believes that the contract has been accepted,while the other sees consent as a preliminary to or adjunct to acceptance. Blurring the

distinction can have serious consequences when an employment contract is "implied"rather than "expressed", e.g,, when the formal operationalization of acceptance, e.g.,through signing, is lacking and clear differentiation of acceptance from consent isproblematic.


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Moreover, the explanation equates "agreement" and "consent" (thereby obliterating any

distinction between agreeing that all terms of a contract are acceptable and consentingto accept them, which returns the discussion to the initial issue of distinguishing consentfrom acceptance, which, on any reasonable interpretation, confirms or "demonstrates"

pre-existing consent, without being reducible to it.

Takeaway lesson: Always distinguish assent from consent, and make certain that there isagreement among the contracting parties and with the law regarding what will constitute the

difference between consent and acceptance.

! Are "but not limited to" clauses and lists acceptable, enforceable or necessary?

Contracts, including employment contracts, frequently contain "limited to" and/or "but not limitedto" clauses. Because these can entail some nightmarish inclusions or exclusions at the expenseof an employee, they must be very carefully reviewed and clearly understood before signing

(and discussed and negotiated, if modifications or deletions are desired).

For example, if an employment contract specifies that "the Employee shall, at the request of the

Employer, make himself/herself available for and accept paid overtime, including, but not limitedto Monday-Friday evenings", the employee may end up being forced to work on the weekendthe family planned and paid for a trip to the Grand Canyon.

! Is a given item in the contract a "condition", or a just a "warranty"?

This distinction is important and somewhat subtle. Lawhandbook.org.au explains it this way:

“'Conditions' of a contract are so important that without them one or other of the parties would

not enter the contract. If a false statement amounts to a condition of the contract, the wronged

party is entitled to rescind (see Glossary) the contract. A court may view the condition soseriously that without it the contract is void; that is, with the false statement taken out of the

contract, there is no contract.

“Less important statements are called 'warranties'. Where the false statement amounts to a

warranty, the wronged party will only be permitted to receive sufficient monetary damages

damages to make up for any loss suffered; the contract will continue to exist and the parties will

continue to be bound by it."

Various explanations state that "terms" designates "conditions", "warranties" and "innominate

terms", and should not be confused with the "glossary" of terms (in the sense of important

words) in the contract. Moreover, such nomenclature makes the concept of "terms andconditions" problematic to the extent that may be taken to mean "conditions, warranties,

innominate conditions and conditions", i.e., is construed as redundant. (This considerationwarrants making sure what the term "terms" means in a given instance.)

If the contractual terms are presented as innominate, according to e-lawresources.co.uk:


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"Rather than classifying the terms themselves as conditions or warranties, the innominate term

approach looks to the effect of the breach and questions whether the innocent party to the

breach was deprived of substantially the whole benefit of the contract. Only where the innocent

party was substantially deprived of the whole benefit, will they be able to treat the contract as at

an end."

! Is an employment contract governed by "tort" law?

Like contract law, tort law governs duties, which, if not performed, can be the basis of litigationand damage claims. However, unlike what holds under the principles of contract law,

" ..the interaction in a tort is never based on consent.Torts generally involve an intrusion by one

party into the safety, health, profit, or privacy of the victim. In fact, if the victim consents to the

tortious conduct, it can serve as a defense that will prevent them from recovering damages.

“This difference with regards to consent is reflected in the way that courts award damages. For

contracts, the purpose of a damages award is to restore the parties to their position before the

breach occurred. In a torts claim, the damages are usually awarded to compensate the victim

for their loss. Punitive damages are sometimes awarded in a tort suit in order to punish the

defendant. Punitive damages are rarely issued in a contracts claim." [Source:www.legalmatch.com.]

Hence, if one party in an employment contract is found to be in breach, damages are likely to belimited to non-punitive forms (of which there are various, e.g., "liquidated damages","consequential damages" and "nominal damages", not to mention court costs). Then there is

this general classification of compensatory, contract-related damages and relief in terms of:

" Expectation: the most common form of breach entitlement, the right to recover an

amount that will put one in as good a position as one would have been in had thecontract been performed

" Reliance: amount necessary to return the plaintiff to the pre-contract state, as if thecontract had never been made

" Restitution: returns what was given to the breaching party.

Damages are only one category of remedies; other remedies include the aforementionedrestitution (restoring something to its rightful owner); injunctive relief (forbidding a party to do an

act); mandamus (requiring a party to do an act); and declaratory relief (a judicial decision setting

forth the legal rights of respective parties even when no further relief is ordered). [Source: http://law.jrank.org/pages/22525/Damages.html.]

This does not mean that tort and contract litigation are mutually exclusive, even though theygenerally must be filed separately. An example of a single suit for breach of contract is easilyimagined:

http://law.jrank.org/pages/22525/Damages.htmlhttp://law.jrank.org/pages/22525/Damages.htmlhttp://law.jrank.org/pages/22525/Damages.htmlhttp://law.jrank.org/pages/22525/Damages.htmlhttp://www.legalmatch.com/law-library/article/contract-and-tort-law.htmlhttp://www.legalmatch.com/law-library/article/contract-and-tort-law.htmlhttp://www.legalmatch.com/law-library/article/contract-and-tort-law.htmlhttp://www.legalmatch.com/law-library/article/contract-and-tort-law.html


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"An example of such a concurrent filing is breach of contract and simultaneous fraud. This is

where the breach of contract is based on the fraudulent conduct of one of the parties." [Source:www.legalmatch.com.]

! Are one-sided, "unilateral" employment contracts possible?

The most common preconception and form of an employment contract is the "bilateral contract",viz., a contract in which employer and (prospective) employee make enforceable promises to

each other. However, there is a less common, less familiar kind of contract that can formulateand establish a quasi-employee relationship. Known as a "unilateral contract", it is perhaps mosteasily understood by consideration of the job of a "freelance" bounty hunter:

"Reward offers are usually unilateral contracts. The offeror (the party offering the reward) cannot

impel anyone to fulfill the reward offer. An offeree can sue for breach of contract, however, if the

offeror does not provide the reward after the offeree has fulfilled the contract's requirements."

At first glance, this seems to resemble some form of "commission-only" sales employment. However, because a public offer of rewards does not (have to) specify any offeree (e.g., a

specific bounty hunter or other individual), no one claiming the reward has any liability for notundertaking the job and its associated tasks—an exemption that a contracted bounty hunter orcommission-only salesman may not enjoy.

One practical implication of the unilateral contract for employers is that they must make certainthat, in offering a commission-only job, they do not inadvertenly make it a unilateral contractthat, by definition, despite requiring promise-performance from the employer, viz., to pay the

commission for any sales, cannot compel the salesman to do anything.

Theoretically, this could apply in a sales hire, as follows:

"The performance [by the salesman] constitutes an acceptance of the offer, and the contract

then becomes executed. Acceptance of the offer may be revoked, however, until the

performance has been completed. This is a one-sided type of contract because only the offeror,

who makes the promise, will be legally bound." [Source: http://legal-dictionary.thefreedictionary.com/implied+contracts.]

! Assuming all other conditions for a valid employment contract, viz., intention,

consent, capacity, consideration and offer, are met, is oral acceptance sufficient

for a binding contract to be created?

The answer is "certainly", "certainly not", "maybe" and "maybe not"—depending on which

expert, which court, which laws and which jurisdiction the answer depends. Online searches willyield conflicting answers, although the weight of opinion suggests oral offer, acceptance,

specification of terms, etc., are binding—the most commonly reported snag being that they maynot be easily proved. Here is but a small sample drawn from countless answers:

" "Why won't an oral Employment Contract be sufficient for me? [Answer:] The problem

with oral agreements is that they are difficult to prove. If a dispute arose, a court would

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have to hear evidence and decide whose version of the truth to accept." [Source:

Lawdepot.com.]

Strictly speaking, this is confused, because it does not deny that oral contracts, offers or

acceptance can be or always are binding, since it merely addresses the challenge of proving that these have occurred, rather than address their enforceable duties. However,notice that the question posed by Lawdepot suggested the issue is sufficiency of oralagreement, not provability —again, attesting that even the "experts" can create as much

confusion as they resolve. Nonetheless, it does alert us to the hazards in expecting acontract to be enforced by a court when the existence of an "oral contract" is alleged.

" "A binding, legally enforceable contract can be in writing or oral (verbal). Depending on

the nature of the transaction involved, certain types of contracts in Florida are required

by law to be in writing in order to be enforceable. Generally other than those required by

law to be in writing, verbal contracts are enforceable in Florida, especially in situations

where one party has performed his or her obligations...However, an agreement, even

after an offer and acceptance, is not necessarily a legally binding contract. For instance,

one cannot contract for an illegal or impossible act . " [Source: www.floridabar.org]

(Underlining added for emphasis. Note how complex and varied the concept of"agreement" is throughout this report and among expert information sources.)

" "Yes, a verbal or oral employment agreement is binding. An employer has an obligation

under the Employment Relations Act to give you a written agreement, but that does not

stop an oral agreement being binding in the meantime, so long as the terms of the

agreement are clear and you can show that you and your employer intended to be

bound by the agreement." [Source: http://www.lawspot.org.nz/employment-law/once-a-verbal-employment-agreement-has-been-made-is-this-legally.]

" "An employment contract can take the form of a traditional written agreement that issigned and agreed to by employer and employee. More frequently, however,

employment agreements are 'implied' — from verbal statements or actions taken by the

employer and employee, through company memoranda or employee handbooks, or via

policies adopted during the employee's employment." (This analysis addresses only thecase of current employees, not that of a job candidate, and thereby calls attention topossible differences in employment contract law vis-a-vis outside job applicants and in-

house employees, e.g., with respect to company memoranda, which are normally arenot readily accessible to job candidates as evidence. Moreover, this perspectivesuggests that oral promises are evidence of an implied binding contract, rather than

binding in and of themselves—which in turn suggests that winning a legal contest based

on the strength of oral promises would be less of a slam-dunk when they are interpretedas evidence of rather than as being tantamount to a binding contract.)

Faced with uncertainties or contradictory claims about the enforceability of oral offers andacceptance, the most prudent strategy is to employ means of offer and acceptance that areindisputably binding, e.g., in writing, through an approved channel, to an authorized party and

within a clearly established time frame. To avoid making an unintended or inadvertent

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commitment or failing to seal one, steer clear of any oral representations that may either be

rejected or upheld in a court of law and against your position.

! Are there any unacceptable definitions in the contract glossary?

Suppose the employer contractually offers to provide the employee "all essential tools", but,after starting the job, the employee. discovering there's no computer or company phone,complains—only to further discover, on closer inspection, that, in the contract, the employer

defined "essential tool" as "any non-digital resource required for the satisfactory performance oftasks and limited to stationery, pens, pencils, paper, sharperner, desk and chair". Caveat signer!

! Does the contract allow for pay-out of salary in lieu of remaining employment after

notice of termination?

If the employment contract is of the "whatever is not explicitly mentioned in the contract is

allowed or prohibited by only the employer and the law" sort, it may be unclear whether, uponnotice of termination, the employee can be forced to accept a cash pay-out in advance.

If you are wondering why any employee in his or her right mind would protest such a "cash-and-dash" buy-out given the inevitability of termination, consider a scenario in which a a researchteam leader is on the verge of completing an important project, but has had a falling out with

management. Just to be vindictive, management wants to get rid of him and deny him valuableand marketable credit for project completion (perhaps in favor of someone being groomed in thewings or possibly with some stock-option claw-back or other financial implications).

Finding out or even broaching this issue of a cash-out can be very difficult, if not in manyinstances impossible, under the circumstances of the job offer. After all, who wants to ask aprospective employer about a termination cash-out and risk raising suspicions? (However,

"high-stakes" executive or super-star athlete and other celebrity contracts may imaginably bethis meticulous, direct and circumspect, even if the average office job offer and the signatoriesare not.)

! Does the contract allow "termination without notice or cause" during a

probationary period?

If it does, it may be worthwhile to discuss at least the "without cause" provision—especially ifthere is any indication that the contract was framed using an off-the-shelf, pot-boiler template orcrafted without expert legal assistance. One marker for such a scenario is an employer who

appears to otherwise operate informally or without much of a grasp of or inclination to use

meticulous and arcane legalese typically found in contracts.

It is particularly important to note whether or not the employment contract is—as is verycommon in the U.S.—an "at will" contract, which is one that allows termination at any time, withor without a reason, unless it is an illegal reason. If the contract is explicitly an at-will agreement,probationary period or not, defense against termination without notice or cause will be difficult, if

not impossible.


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! Is an employment contract still binding if consent is withdrawn?

Obviously, the answer, in general, is "yes", if, at the time of signing, consent—along with allother elements of a contract—was confirmed. If it were otherwise, contracts would have no

teeth, because consent would provide no contractual assurances, given the notion that it couldbe withdrawn and that the withdrawal would void the contract.

The closest thing to "withdrawal of consent" in a standard employment contract is probably

exercise of rights of termination, although it is conceivable that a contract could be drawn upwith a "consent clause" that allowed both withdrawal of consent and voiding of the contract onthat basis. However, how that would be any different in effect or in concept from a simple

termination clause is unclear.

In some contracts, there is an additional, more esoteric route to withdrawal from a contract:

"Contrary to what many people believe, there is no automatic right to cancel a legally binding

contract once there has been a valid offer and acceptance. The right to cancel a contract is

called the 'right of rescission.' Only certain types of contracts are required to come with a right of

rescission. If a contract provides a right of rescission, in order to cancel such a contract, you

must give written notice of cancellation within the time provided by the contract or by law and it

must be in the form required." [Source: "Legal and Binding Contracts", www.floridabar.org.]

! Does the contract make no mention of conditions of termination?

If a contract also specifies that it constitutes "the entire understanding" between the signatories,

termination can become a muddle and a hornets' nest if nothing pertaining to terminationconditions, rights and duties is mentioned in the contract. It must be noted that making only theconsequences of termination explicit, e.g., return of all work materials and keys, in no way

sheds light on contractual grounds and rights for it, apart from whatever constraints or guidancethe prevailing employment laws provide.

If you are presented a contract with missing termination details, requesting them should bereasonable, especially since their omission may be due to nothing more than oversight orunfamiliarity with what contracts should include.

Have the employer, the employee or circumstances materially changed some critical term

or understanding of the contract obligations, promises or rights without joint consent

and prior to signing, but after oral acceptance of the original offer? Would these be

upheld by a court having jurisdiction?

The following is a true, ongoing (2015) story, not a hypothetical case: "Sam" has orally and in an

email accepted a career position with an institutional employer in Kenya. Orally promised safeand posh accommodation in a private city-center condo and generous tax exemptions, heaccepted in good faith. However, almost immediately after he accepted and well ahead of hisscheduled arrival, a brutal terrorist attack in Garissa, claiming 147 lives, on a university just a

couple of hours away from the prospective work site left him very concerned for his safety—

http://www.cnn.com/2015/04/07/africa/kenya-attack-victims-vigil/http://www.cnn.com/2015/04/07/africa/kenya-attack-victims-vigil/http://www.floridabar.org/tfb/TFBConsum.nsf/0a92a6dc28e76ae58525700a005d0d53/6a653200b74c8a2085257405007a3ac3!OpenDocumenthttp://www.floridabar.org/tfb/TFBConsum.nsf/0a92a6dc28e76ae58525700a005d0d53/6a653200b74c8a2085257405007a3ac3!OpenDocument


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especially in light of alarming U.S. and Canadian government Kenya travel advisories and his

being a very visible expat with various "target" characteristics.

Shortly after the incident, the prospective employer informed him that the condo offer had been

withdrawn and that he would be living in a gated compound under close surveillance (includingregistration and monitoring of all visitors) and that the substantial tax exemptions would beexpiring. Despite whatever good intentions regarding his safety underlay the employer-initiatedchange in accommodation, Sam has felt uncomfortable because of the loss of privacy and

because of the possibly heightened risks in being assigned to an even more visible andtempting target. The loss of the promised tax exemptions only compounded his compoundanxieties, since his net income would be reduced by a very large percentage.

The urgent question for Sam is whether these changes in the previous joint understanding ofthe terms and conditions of employment, now unilaterally imposed by the prospective employer(even if, in part, motivated by concerns for his safety), are legally enforceable and, if disputed, in

which binding jurisdiction. Without specification of the latter and consultations with the mostappropriate legal experts and representation, any opinion on the matter would be moot. So,Sam needs to consult with a lawyer—or two (one at home, one in Kenya).

! Must an employment contract be signed to be binding, once the job offer has been

accepted?

Many cases related to this scenario are likely to be covered by the concepts of contracts"implied by fact" and "implied by law", if the acceptance itself is only implied, e.g., by movingyour personal rubber plant into the cubicle the employer has provided for you and before you

actually start working. When a party to a contract prima facie accepts through actions or verbalcommunications that imply acceptance (such as "Please don't touch my rubber plant; this is myspace"), signing may not be required, as the Gov.UK standards examine above demonstrate.

When formal acceptance has been secured, the case for a binding and enforceable contract isstronger, if not airtight.

! Will the contract require that the employee waive rights established independently

of and prior to the contract, e.g., intellectual property rights?

Suppose a university, pharmaceutical company or some other organization or employer will hirea researcher only if (s)he waives and hands over all previously established personal intellectualproperty rights pertaining to original designs, ideas, diagrams, unpatented inventions,

discoveries, research notes, etc., except for those listed in an attachment to the contract. (This

is not a hypothetical case; it happens.) The attachment does provide some measure ofprotection, but only for what is listed.

Unless one has had so few ideas, designs, research notes, and the like, that they are easy torecall or has nearly perfect recall of the entire multitude of them, accepting such a waiver orsurrender contract term will be a very, very bad idea and potentially personally very costly (e.g.,

in terms of the commercial implications of lost property rights).


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! Can an employer make a probationary period indefinite, e.g., until convinced the

employee is "right for the job"?

Although probationary periods are almost universally defined as limited, e.g., to three months,

for the sake of clarity and peace of mind, it is advisable to have the duration made explicit in acontract, allowing that it may have been omitted from oversight, rather than by design.

! Does an employment counter-offer nullify the original offer or will it still stand if

the counter-offer is declined?

Countering an offer renders the original offer void, whether the counter-offer is accepted,

rejected or merely pondered. This means that if an employer or a prospective employeeevidences resistance to an offer by countering it with some modified, added or eliminatedcondition(s), the original offer will not be binding and will in fact legally cease to exist, i.e., will benullified and canceled as "void". Presumably, if the counter-offer is pondered too long, it will

eventually expire (assuming some imposed or implicit time frame), much as initial offers expirewhen acceptance is delayed beyond the time limit.

Although almost universally understood, this voiding consequence of making a counter-offermay nonetheless be lost sight of by a party to a contract who, suddenly seized with "rejector'sremorse" after his or her counteroffer is not accepted or fearful of alienating the other party, may

have a change of heart and attempt to "commit" to or reinsate the original offer.

Even though the party who made the initial offer may be happy to revert to its terms, from alegal standpoint, the revived offer will be considered a fresh offer or counter-offer.

! Can an offer be withdrawn?

The simple and clear answer is, abstractly and generally speaking, "yes", in at least two almostalways clear cases; First, if it is withdrawn before acceptance. However, one subtlety implicit inthe question and in the details is to whom, when and how notification of the withdrawal is to be

provided. For example, what happens if a client company withdraws a job offer by notifying itsindependent recruiter who unfortunately fails to notify the job candidate before (s)he acceptsand turns down an alternative, now foreclosed job offer. Will the employer company be boundby the acceptance, liable for damages or other remedies, or will the recruiter be held solely or

partially legally responsible?

Or does the candidate have to not grin, but bear it, and accept the withdrawal of the job offer?

That's one for the lawyers to field.

The second instance in which an employer is likely to be able to withdraw an offer is when the

offer is "conditional" (as opposed to "unconditional"), i.e., the offer is not binding uponacceptance, but instead is enforceable only if and when certain specified employer-imposedconditions are met, e.g., "clean" criminal record investigation results and vetted, satisfactoryreferences.


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Conditional sales in real estate constitute an analogous situation, in which "completion" of the

sale,is delayed until all conditions imposed on vendor and buyer (who have offered andaccepted, although not necessarily in that respective order), such as competion of structural andseptic inspections or confirmed financing, are met or waived.

However, this is not necessarily a slam-dunk for the employer, especially if the withdrawal of theoffer occurs after acceptance. In its June 6, 2013 report, "What to Do When Your Job Offer isWithdrawn", Usnews.com, quotes Brian Waerig, an employment attorney with the Wayne,

Pennsylvania.-based firm Susanin, Widman & Brennan, PC:

"...if you're applying to be a clerical employee and the employer decides not to hire you because

you have a conviction for a DUI, you might have a claim."

When the employer has withdrawn the offer after acceptance, things can get ugly or at leastuglier. For example, Gov.UK outlines these post-acceptance scenarios that follow. Notice that,

conceivably, withdrawal of an offer prior to acceptance, as well as after, may, if supportableevidence is at hand, trigger a complaint of discrimination (but with no assured results, generallyspeaking).

[Source: https://www.gov.uk/job-offers-your-rights]

It is important to note that the described inability of the job applicant to take any action whensome condition is not met may not be as categorical as the Gov.UK account suggests, given thescenario the USnews.com report allows for.

Comparable legal redress may even be available to a job candidate whose offer has beenwithdrawn after acceptance. In the US news.com report, attorney Brian Weirig offers this

scenario:

"Let's say, for example, that an employer in the state of Pennsylvania extends an offer to an

employee 'at will,' which means that the employee can be terminated at any time for any reason

or no reason unless it is an illegal reason, and agrees to pay the new employee a salary of

$80,000, and that employee quits her old job in California, sells her house and moves her kids

across the country, at which time the company revokes the offer... A court in this state may look

Situation Action

The applicant has evidence that the employerdiscriminated against them when withdrawingthe offer.

The applicant can take the employer to anemployment tribunal.

The employer has confirmed that the job offerwas unconditional, or the applicant has metall conditions.

The applicant can sue the employer for‘breach of contract.’

The offer was conditional and the applicantdidn’t meet the conditions.

The applicant can’t take any action.

https://www.gov.uk/employment-tribunalshttps://www.gov.uk/employment-tribunalshttps://www.gov.uk/discrimination-your-rights/discrimination-at-workhttps://www.gov.uk/discrimination-your-rights/discrimination-at-workhttps://www.gov.uk/job-offers-your-rightshttps://www.gov.uk/job-offers-your-rights


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at that equitably and find that the at-will relationship was altered and an implied employment

contract exists between the parties.'"

Report Retrospect

The foregoing list of questions (in part an "IAQ") is, of course, not a complete andcomprehensive compendium of employment contract queries and issues. That has not been theintent in compiling this report. instead, the main objectives have been these:

" Alert potential parties to contracts of the importance of raising questions not consistently(in both senses of "consistently") found or answered in standard FAQ's or Q&A's.

" Create awareness of the risks of depending upon free, online and other advice regardingemployment contracts. especially in light of the wide divergence in legal concepts,interpretations and claimed implications.

" Pose important, yet less frequently asked employment and general contract questions

By keeping these objectives in mind and one's wits and lawyers about oneself, the odds ofbeing bound by a contract only when that is desired can become very favorable as compared tothe odds of finding oneself in a nasty bind for failing to do so.

Documents

Employment Contracts-Unexpected Questions and Variable Answers