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Wk3 2 hr1

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  • 1.
    • REVIEW
    • HUMAN RESOURCE MGMT I
      • Elements of contract
      • Provisions of employment contract
    • WRAP-UP
  • 2.
    • 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!)
  • 3.
    • 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
  • 4.
    • ELEMENTS OF CONTRACT: TO BE LEGALLY ENFORCEABLE, A CONTRACT MUST HAVE ALL FOUR 
      • Offer
      • Acceptance
      • Consideration
      • No defense
  • 5.
    • 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”
  • 6.
    • 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!”
  • 7.
    • 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”
  • 8.
    • 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
  • 9.
    • 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
  • 10.
    • 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
  • 11.
    • 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
  • 12.
    • 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
  • 13.
    • 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
  • 14.
    • 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)
  • 15.
    • 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
  • 16.
    • 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”
  • 17.
    • 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)
  • 18.
    • FORMATION OF CONTRACT
      • Offer
      • Acceptance
      • Consideration
      • No defense against contract’s enforceability
  • 19.
    • 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
  • 20.
    • EMPLOYMENT CONTRACT: PROVISIONS
      • Reassignment
      • Compensation
      • Terms of employment
      • Termination & liquidated damage
      • Covenant not to compete
      • Employment at will

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