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How Does an Employment Contract Become Legally Binding?

Whitten and Lublin | Sep 17, 2018

If a court were to analyze any terms of the employment contract in a case for damages, the court would seek to determine whether the contract was enforceable. One key question asked during this analysis is: what were the parties able to contemplate at the time the employee agreed to provided services?

For instance, suppose the employee’s contract contains a termination clause, which seeks to limit the greater damages the employee is entitled to at common law. In the event that the employee is claiming they are owed greater common law damages, one thing the court will consider is whether the employee could have contemplated being limited to termination pay less than common law at the time he/she accepted the job.

One factor to look at is at which point relative to when the employee started work was the employment contract signed. If the contract was signed the moment before the employee’s first shift occurred or after the employee has started work, this would prove problematic for the employer. In this instance, the employee would not have had the opportunity to contemplate being subject to certain clauses, such as a termination clause. This is permissible, however, if the employee received a copy (electronic or physical) before the start date. This is because the employee would have had an opportunity to consider the clauses of the employment contract, and therefore foresee any events related to the conditions contained within the letter of offer/employment contract, before formally starting or accepting employment. As employment contracts are complex and often require expert interpretation, it is always advisable to grant a prospective employee the time needed to fully consider an offer.

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