Contracts are instruments that businesses use to enter into legally-binding agreements with other parties. In the design of contracts, businesses should exercise great care to ensure that the interests of all parties are satisfied. It is also important for firms to confirm that their contracts contain the six essential elements: offer, acceptance, consideration, mutual obligations, capacity and a written instrument (Boundy, 2012). The following is a contract for a small family business. The aim of the contract is to stipulate the protections and the obligations of the employees of the businesses who wish to pursue further studies without losing their jobs.
This contract is between the management of Smith Inc. and …………………….. (Employee Name).
Purpose: The purpose of this paper is to guarantee the employment of those who desire to pursue further studies while still working for the company.
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Eligible employees: All employees who have served for at least one year are eligible for this program. However, special consideration will be given to employees who have served for less than one year but still wish to further their education.
Compensation: As they pursue further studies, employees will continue to receive payment for their services. However, payment will only be made if employees remain available for at least 40 hours a week.
Employee obligations: During the length of their education programs, all employees must work for at least 40 hours a week. For employees who are unable to meet this requirement during the working week, they will need to present themselves for work on Saturdays. Should they be required to commit more time to meet the 40 hour requirement, the company will ask the employees to work on Sunday as well.
Employer obligations: The company will continue to pay the full salary and all applicable benefits. Furthermore, the company will pay $10,000 in fees for the education programs that the employees undertake.
Termination: This contract will stand terminated at the end of the program that an employee undertakes.
Signature Signature
Date Date
The development of a contract is a complex process. As they design and sign contracts, parties need to consider ethical and legal issues. One of the ethical issues that define contracts concerns capacity. Recently, the Trump administration awarded a contract to a small firm to facilitate disaster relief in Puerto Rico. The contract was suspended because after it was determined that the company did not meet the financial requirements needed to meet the obligations set out in the contract (Lardieri, 2018). The example of this company highlights the need for all parties to a contract to possess the necessary capacity. The issue of capacity is relevant to the contract written out above. It is possible that some employees who sign the contract may be unable to execute their obligations. No provision has been made for this possibility in the contract.
Ensuring fairness is another ethical consideration that parties should make when drawing up a contract (Willett, 2007). They should ensure that the contract serves the needs of all. The contract provided above strives to achieve fairness. It outlines the obligations that the employees and the company will be expected to meet. The contract also stipulates the rewards that the employees who choose to pursue further education can expect. Overall, this contract is both fair and balanced. Since the company specified the terms of the contract, one would expect that there would be some imbalance in the distribution of obligations. As is clear from the terms of the contract, this is not the case. The contract between the company and its employees underscores the need for the party outlining the terms of the contract to uphold such values as fairness, objectivity and transparency.
References
Boundy, C. (2012). Business Contracts Handbook. Farnham: Gower Publishing.
Lardieri, A. (2018). Puerto Rico Suspends $133M Contract to Failed FEMA Nominee’s Firm. Retrieved March 18, 2018 from https://www.usnews.com/news/national-news/articles/2018-02-16/puerto-rico-suspends-133m-contract-of-failed-fema-nominees-firm
Willett, C. (2007). Fairness in Consumer Contracts: The Case of Unfair Terms. Farnham:Ashgate Publishing.
