Starting a Business
12. Employment Contracts
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 24 Sep 2015
- Whether you engage independent contractors or employees it is important to understand how a contract works.
- A contract can be:
- informal or formal;
- written or verbal; and
- standard or specially drafted (written).
- Whatever form the agreement takes, if it is a contract it is legally enforceable and remedies can be pursued for any breach. This affects both the employer and employee.
- Broadly speaking a contract is a commercial agreement made between an individual and a hirer or employer.
- Written contracts are usually preferred as they provide a greater degree of certainty and risk minimisation for your business.
- Written contracts allow both you and your employees or contractors to clarify expectations as well as rights and obligations if a problem arises.
- A written contract is essential if the contract value is high and there is a potential risk to your business if a breach occurs.
- It is possible to establish an enforceable verbal contract that is supported by evidence such as:
- e-mails;
- quotations;
- lists of materials and
- job specifications.
- However verbal contracts are only viable until something goes wrong. It is best to take the time to draft a written contract which will ensure:
- your needs are met;
- the obligations of both parties are clear; and
- there is recourse to legal remedies if a problem arises.
- A lawyer can assist you in drafting employment contracts that meet your specific needs.
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