1
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
3
4
• 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
5
• Affects all fields of business
• Includes the following common business
transactions:
– sale of land
– property leases
– product sales
– product orders
6
• 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
8
• 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
9
• 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
10
• 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
11
• 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
12
Uniform Commercial Code
(UCC)
- governs the sale of goods
Common law
- judge-made law passed
down over the years
13
• 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
14
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
15
• 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
16
• 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
17
Original offer
Party A
Party A
Party B
Counteroffer
Party B
18
• 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
19
• 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.
20
• 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
21
• 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
23
• 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.
24
• 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
25
• Contracts contain key areas, including:
– title
– description of project
– description of services
– list of delivery dates
– who is responsible for what
– payment amounts
– signatures
26
27
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
2.
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
4.
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
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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
30
31
• 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
32
• Includes countless laws enacted to
protect workers
• Includes laws which affect every
American, such as taxes collected to
finance unemployment compensation
33
collective
bargaining
employment
discrimination
pensions
unemployment
compensation
worker’s
compensation
34
• 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
36
• 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
37
• 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
38
• 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
39
• 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
40
•
http://www.dol.gov/esa/regs/compliance/posters/pdf/disabc.pdf
41
• 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
42
• 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
44
• 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
46
• Provide monetary payments to families
if a family member is killed on the job
• Fund payments through the Federal
Employment Compensation Act
47
• 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
50
• 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)
52
• 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
53
• 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
54
• 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
57
1.
Which of the following are laws which protect workers?
A. Employment laws
B. Health insurance laws
C. Financial laws
D. Wage laws
2.
Which of the following is NOT an area of employment
law?
A. Collective bargaining
B. Pensions
C. Discrimination
D. Contract
58
3.
Which of the following is a group formed by employees
to negotiate with employers?
A. Collective bargainers
B. Union
C. Task force
D. Agents
4.
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
5.
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
60
61
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
62
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
65
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
66
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
67
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