Contract/Employment Law PowerPoint/Notes

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1. To discuss contracts. 2. To discover the creation process of a contract. 3. To explain employment law. 4. To examine how employment law affects both employees and employers. 5. To analyze how employment laws affect business. 2

• Contract Law • Employment Law

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• Is a legally binding document • Is between two or more parties – people, organizations or corporations • Creates an obligation • Is usually regulated and enforced by the state in which it was written

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• Affects all fields of business • Includes the following common business transactions: – sale of land – property leases – product sales – product orders

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• Include: – franchise agreements – real estate leases – equipment contracts – warranty contracts – stock purchase agreements – manufacturing agreements 7

• Is becoming increasingly more complicated as businesses now write more contracts than ever • Is effecting business due to increased litigation • Affects businesses due to increased legal fees

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• Provide proof for future legal situations in case of legal disagreements • Help parties realize what is expected of them in a contract • Force the parties to agree on details, such as the exact number of goods or the exact price for a contract – this can prevent verbal arguments over small disagreements such as a shipping date which may take a long time to fix down the road

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• Are legal contracts made through speech – there may be no written evidence • Are just as enforceable and as legally binding as written contracts • May be harder to prove in court – therefore, most business contracts are written

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• Which must be in writing include: – real estate – goods valued at more than $500, such as a contract for the creation of handmade purses which total $800 – actions taking a year or longer to perform, such as a construction project which will take three years to complete

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• Which may be oral include: – most other contracts, such as an agreement for your neighbor to mow your lawn in exchange for a monetary payment could be made orally and still be legally enforceable

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Uniform Commercial Code (UCC) - governs the sale of goods

Common law - judge-made law passed down over the years

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• All parties involved in a contract must be competent – able to execute the contract • All parties must agree to the terms of the contract; known as mutual agreement

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Offer

Acceptance

Consideration

for a good or service must be in definite terms another party agrees to the terms bargaining in which parties give up and/or receive something

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• Stays open for a time specified on a contract or for a “reasonable” time – reasonable refers to a court interpretation of what would be reasonable considering the circumstances

• Can be taken away, or revoked, by the party which offered the contract until the other party agrees • Is legally binding once the other party agrees

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• Occur when the original offer is not accepted and a new offer is returned in place of the original offer • Void, or nullify, the original offer • May be accepted, rejected or modified by the party which made the original offer

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Original offer Party A

Party A

Party B

Counteroffer

Party B

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• Occurs when the party to which the offer was made agrees to the terms of the contract • May not be made immediately • Must somehow be communicated to the party offering the contract – silence does not usually count for a legal acceptance

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• An art studio contacts an artist by mail to create a painting. Once the artist signs the contract and places the contract in the mail, the contract has been accepted and is now legally binding.

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• Is the legal term for the bargain occurring when one party gives something up and another party receives something in return • Requires both parties to either give or receive something of value • Does not include one-sided promises such as gifts

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• If your friend promises to give you a new car for your birthday, but you give him or her nothing in return there is no consideration. Therefore, your “contract” would not stand up in a court of law. • However, if you traded him a trip to your beach house in Hawaii for the car, both parties would be giving something of value, or consideration, and therefore a legal contract would exist. 22

• Occurs when one party intentionally or unintentionally does not fulfill their contractual obligations • Awards the other party some kind of reward under law – this may include monetary damages or cancellation of the entire contract

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• Fictitious star basketball player Kevin Jumes agrees to wear a pair of shoes from Syke Shoes, Inc. At game time he instead puts on a pair of Air Nine Stripes, a Syke competitor. Syke could sue for a breach of contract and possibly get the contract enforced.

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• Can destroy a business’s reputation • May sever business relationships with the other contractual party • Can cause one party to be sued by the other party – if sued, the court may require the breaching party to fulfill the original contract anyway; this is called specific performance

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• Contracts contain key areas, including: – title – description of project – description of services – list of delivery dates – who is responsible for what – payment amounts – signatures

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1.

Which of the following does NOT require a contract in writing? A. Real estate B. Goods over $500 C. Goods under $200 D. Actions taking longer than one year

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Which of the following governs the sale of goods? A. Universal Commercial Code B. Unified Commercial Code C. Trade of Goods Commission D. Sales Commission 28

3.

Which of the following is NOT part of a contract? A. Offer B. Acceptance C. Consideration D. Introduction

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Which of the following occurs when the original offer is not accepted and a new offer is returned in place of the original offer? A. Replacement offer B. Acceptance C. Counter offer D. Consideration 29

5.

Which of the following occurs when one party intentionally or unintentionally does not fulfill their contractual obligations? A. Counter offer B. Acceptance C. Breach of contract D. Consideration

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• Is defined as the large area of law covering all aspects of the employer and employee relationship • Is important to know from both sides: as an employee and as a company • Consists of thousands of laws

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• Includes countless laws enacted to protect workers • Includes laws which affect every American, such as taxes collected to finance unemployment compensation

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collective bargaining

employment discrimination

pensions

unemployment compensation

worker’s compensation

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• Is when employers and employees negotiate their salary and work requirements • Involves the employees being represented by a union, a group formed by employees to negotiate with the employer • Is governed by the National Labor Relations Act 35

• Can sometimes lead to strikes and layoffs to force demands • With union representation is less popular now than in the past

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• Is common in the sports industry • Many of the top professional leagues have players unions – for example, a strike lead to a 191 day lockout of the 1998 NBA season – the NBA owners, teams and league lost nearly one billion dollars

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• Is a federal law passed in 1935 • Allows employees to join unions and collectively bargain • Prevents employers from seeing which employees are in a union • Created the National Labor Relations Board to oversee and enforce the NLRA

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• Aims to prevent employment discrimination based on race, sex, age, religion or physical disability – the Equal Pay Act states employers cannot discriminate wages based on gender – the Americans with Disabilities Act of 1990 makes it unlawful to discriminate employees based on a disability

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• Is a federal organization overseeing most employment discrimination laws including the Equal Pay Act and the Americans with Disabilities Act of 1990 • Requires employers to display posters with employment discrimination law topics • Handles employment discrimination complaints • http://www.eeoc.gov

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http://www.dol.gov/esa/regs/compliance/posters/pdf/disabc.pdf

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• Provides funds for workers who are unemployed due to layoffs • Allows time for workers to find another job • Prevents workers from taking a job for which they would be overqualified • Was established by the federal Social Security Act in 1935 • Is funded by taxpayers

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• Are payments made to employees after retirement, similar to a retirement plan • Are regulated by the Employee Retirement Income Security Act (ERISA) • ERISA requires employees and the Labor Department receive a detailed list of what each employee will receive when it is time to collect their pension – this prevents fraud and allows the employees to see they are receiving adequate funding 43

• Is an important area of employment law for employees’ well being • Is regulated by laws regarding employee injury and illness occurring on the job • Is mainly controlled by the Occupational Safety and Health Administration (OSHA) – regulates and investigates workplace incidents involving injury and illness for most U.S. workers

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• In Brooklyn, N.Y., an OSHA compliance safety and health officer requested construction employees be removed from a 22-foot deep excavation due to the hazardous 10-ton concrete protrusion hanging above them. Fifteen minutes later, the overhang collapsed and fell, landing in the exact spot where the employees had been working. 45

• Are designed to provide payment and assistance to employees who are hurt or disabled on the job • Provide fixed monetary awards to such individuals • Protect employers by limiting the maximum amount an employee can recover if hurt or disabled

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• Provide monetary payments to families if a family member is killed on the job • Fund payments through the Federal Employment Compensation Act

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• Contract law and employment law are interrelated • Many employment laws, such as pension plans and labor unions use contract law to enact and enforce their employment laws Contract Law

Employment Law 48

• For example, labor unions such as the United Auto Workers operate under employment law • They work to gain favorable labor contracts for their workers – the labor contracts would be considered an area of contract law

• In this way, employment law can be thought of as a part of contract law 49

• However, contract law and employment law are different in the fact that employment law changes much more frequently than contract law – most of contract law was enacted after years of law and thus does not change often – employment law affects more current events such as pension plans and worker’s compensation Contract Law

Employment Law

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• U.S. businesses spent about $11 trillion last year complying with these laws • Most of those transactions fall under contract law • Dues for labor unions are covered under employment law – these laws affect the lives of millions of workers – for example, the union of United Auto Workers at Honda in Toronto requires dues of two hours pay per month 51

• Is concerned with worker’s rights • Includes the right to organize and/or join a union • Includes the right to strike • Prevents an employee from being fired or demoted because of union activity (such as joining a union or discussing union activities)

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• Is the most common type of employment in the United States • States the employee can leave the job at any time, without reason • Also means the employer can terminate the employee at any time, without reason

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• Are organized to protect the rights of employees • Negotiate contracts containing clauses protecting against “at will” termination • Require membership to be covered by contract negotiations

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• In 2003 the employees of major grocers in St. Louis went on strike – the ability to strike is granted by the National Labor Relations Act – 10,000 grocery workers went on strike

• After six months of negotiation the grocers and union of the grocer’s employees came to an agreement • Grocers agreed to new healthcare rules and a raise for employees • Grocers lost millions of dollars in sales due to the strike 55

• According to the Bureau of Labor Statistics 12 percent of U.S. employees were unionized in 2006 – in 1983, 20 percent of U.S. employees were unionized – the percentage of unionized workers continues to fall

• Is likely suffering due to the downturn in U.S. manufacturing, an industry which was historically highly unionized 56

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1.

Which of the following are laws which protect workers? A. Employment laws B. Health insurance laws C. Financial laws D. Wage laws

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Which of the following is NOT an area of employment law? A. Collective bargaining B. Pensions C. Discrimination D. Contract 58

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Which of the following is a group formed by employees to negotiate with employers? A. Collective bargainers B. Union C. Task force D. Agents

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The Equal Pay Act focuses on the discrimination of wages based on which of the following? A. Gender B. Age C. Race D. Disability 59

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The acronym EEOC stands for which of the following? A. Equal Employment Opportunity Council B. Employment Equality Opportunity Council C. Equal Employment Opportunity Commission D. Employment Equality Opportunity Commission

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1. Contracts are usually regulated and enforced by which of the following? A. B. C. D.

The city in which they are written The county in which they are written The state in which they are written The country in which they are written

2. A product sale is considered a contract. A. True B. False

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3. Common law governs the sale of goods. A. True B. False

4. Which of the following is the legal term for the bargain occurring when one party gives something up and another party receives something in return? A. B. C. D.

Offer Counteroffer Consideration Negotiation 63

5. John and Jane signed a contract for the sale of John’s car. Jane breached the contract, so John sued her. The court is requiring Jane to fulfill the original contract. This is known as which of the following? A. B. C. D.

Revoking the contract Common law Consideration Specific performance

6. Employment law covers all aspects of the employer and the employee relationship. A. True B. False 64

7. What is a union? A. Federal agency overseeing most employment discrimination law B. Federal agency regulating and investigating workplace incidents C. A group formed by employees to negotiate with the employer D. A group formed by employers to negotiate with employees

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8. What is the EEOC? A. Federal agency overseeing most employment discrimination law B. Federal agency regulating and investigating workplace incidents C. A group formed by employees to negotiate with the employer D. A group formed by employers to negotiate with employees

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9. What are pensions? A. Judge-made laws passed down over the years B. Groups formed by employees to negotiate with the employer C. People, organizations or corporations D. Payments made to employees after they have retired

10. What is the OSHA? A. Federal agency overseeing most employment discrimination law B. Federal agency regulating and investigating workplace incidents C. A group formed by employees to negotiate with the employer D. A group formed by employers to negotiate with employees

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• "Breach of Contract" and Lawsuits. (2008). Retrieved September 30, 2008, from FindLaw: http://smallbusiness.findlaw.com/business-formscontracts/business-forms-contracts-overview/business-formscontracts-overview-breaching.html • Acceptance of COntract. (2008). Retrieved September 30, 2008, from BarristerBooks.Com: http://www.west.net/~smith/acceptance.htm • Business.Gov. (2007). Retrieved September 30, 2008, from Business.Gov: http://www.business.gov • Contracts 101: What Makes a Valid Contract. (2008). Retrieved September 30, 2008, from FindLaw: http://smallbusiness.findlaw.com/business-formscontracts/business-forms-contracts-overview-simple.html • Contracts Basics. (2008). Retrieved September 30, 2008, from FindLaw: http://smallbusiness.findlaw.com/business-formscontracts/business-forms-contracts-overview-basics.html

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• Collective bargaining. (n.d.). Retrieved September 30, 2008, from Cornell University Law School: http://www.law.cornell.edu/wex/index.php/Collective_bargainin g • FAQ: Employment Law. (2008). Retrieved September 30, 2008, from The Cleveland Law Library Association: http://www.clelaw.lib.oh.us/Public/Misc/FAQs/Employment.html • Sherk, J. (2007). NLRB Organizing Elections Favor Unions, Not Employers. The Heritage Foundation . • Top 10 Reasons to Avoid Breaching a Contract. (2008). Retrieved September 30, 2008, from FindLaw: http://smallbusiness.findlaw.com/business-formscontracts/business-forms-contracts-overview/business-formscontracts-overview-avoid-breaching.html • Union. (n.d.). Retrieved September 30, 2008, from WordNet Search - 3.0: http://wordnet.princeton.edu/perl/webwn?s=union

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Employment discrimination. (n.d.). Retrieved September 30, 2008, from Cornell University Law School: http://www.law.cornell.edu/wex/index.php/Employment_discrimina tion OSHA Saves Lives Images. (2008). Retrieved September 30, 2008, from U.S. Department of Labor: http://www.osha.gov/as/opa/oshasaveslives.html Pension. (n.d.). Retrieved September 30, 2008, from Cornell University Law School: http://www.law.cornell.edu/wex/index.php/Pension Unemployment compensation. (n.d.). Retrieved September 30, 2008, from Cornell University Law School: http://www.law.cornell.edu/wex/index.php/Unemployment_compen sation Workplace safety. (n.d.). Retrieved September 30, 2008, from Cornell University Law School: http://www.law.cornell.edu/wex/index.php/Workplace_safety

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• Andreeva, C. D. (2007). Hollywood scribes, studios back in the ring. Reuters . • Business and Contract Law. (2008). Retrieved September 30, 2008, from Falconburyy Business Seminars: http://www.falconbury.co.uk/public/course/business-andcontract-law • Kanter, M. O. (2003). Writing a Contract. TechSoup . • Thompson, S. (2006). Understanding Oral Contracts. AC Associated Content . • Workers compensation. (n.d.). Retrieved September 30, 2008, from Cornell University Law School: http://www.law.cornell.edu/wex/index.php/Workers_compensati on

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• Basic US Labor Law (in a Nutshell). (n.d.). Retrieved September 30, 2008, from Industrial Workers of the World: http://www.iww.org/organize/laborlaw/rights1.shtml • NBPA History. (n.d.). Retrieved September 30, 2008, from NBPA.com: http://www.nbpa.com/history.php • Staff, E. (2007). Key U.S. Business Spending Trends Reveal Increase in Temp Labor Spending . SDCExec.Com . • The Basics of Labor Law. (n.d.). Retrieved September 30, 2008, from Unions.org: http://www.unions.org/home/unionlaborlaw.php

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• Gross, D. (2007, April 8). Latte Laborers Take on a LatteLiberal Business. The New York Times . • Strike over, Hollywood writers head back to work. (2008, February 13). Retrieved September 30, 2008, from CNN.com: http://www.cnn.com/2008/SHOWBIZ/TV/02/13/writers.strike/in dex.html • Times, T. N. (2008, February 12). The 100-Day Writers’ Strike: A Timeline. The New York Times . • Union membership in U.S. falls by 326,000. (2007). Northwest Labor Press . • Willoughby, T. (n.d.). Post-strike thoughts about the 2003 . Retrieved September 30, 2008, from TimsLaw.Com: http://www.timslaw.com/grocery-strike.htm

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