Contract Law and Employment Issues

Contract Law and Employment Issues

Chapter 10

Copyright © 2007 Thomson Delmar Learning

Objectives

• Define contract, offer, acceptance, consideration, and promissory estoppel.

• Explain the difference between apparent authority, and void and voidable contracts.

• Identify types of contracts commonly associated with the fire service.


• Explain why insurance companies are so highly regulated.

• Identify important issues associated with mutual aid agreements.

• Define employee at will and explain the requirements of due process as it relates to the discipline of a firefighter.

Objectives


• Explain how workers’ compensation systems operate in general, and the variations associated with firefighters.

• Explain how the principle of exclusivity functions to provide immunity protection to employers.

Objectives


Contract

• Mutual promises– Unilateral promise is not enough

• Consideration– Promise to do something one is already required to

do is not consideration


Offer and Acceptance

• Contract = clearly defined offer + an unambiguous acceptance + mutual consideration– Conduct of both parties must be intentional,

voluntary, and knowing– Absence of an offer and an acceptance = no

contract


Contract Formality

• Contracts may be written, oral, or implied• Certain types of contracts must be in writing to be

enforceable


• Statute of frauds varies from state to state• General rule:

– Sale of goods over $500– Real estate transactions– Contracts that will take over one year to complete

Contract Formality


Breach and Damages

• Breach is a violation of a contract• The party who breaches the contract is then

liable to the other party for damages• Damages—a complex topic:

– Put nonbreaching party in as good a position as they would have been if contract had not been breached

– Cost of cover plus consequential damages


Authority to Contract

• Actual authority—the formal legal authority to bind another to a contract – State or municipal entity—usually spelled out by

statute, ordinance, or charter – Private corporation—usually specified by the

organization’s charter and/or bylaws


• Due diligenceresponsibility to take reasonable steps to make sure that the person signing the purchase and sales contract has actual authority



• Apparent authority—a corporation holds a person out as having the authority to bind the corporation, or knowingly allows a person to hold him- or herself out as having the authority



Void or Voidable Agreements

• Void– Cannot be enforced by either party– Against public policy

• Voidable– May be rescinded by one or both parties


Capacity to Contract

• Age of majority• Mental impairment• Duress• Actual versus apparent authority

– Due diligence


Promissory Estoppel

• Unilateral promise• Relied upon to detriment• Maker of promise knows of reliance• Equitable principle


Fire Service Contracts

• Mutual aid agreements• Insurance policies • Purchasing • Employment agreements


Mutual Aid Agreements

• Between communities and fire departments• Should address

– Expenses incurred– Liability– Reimbursement– Limitations


Insurance

• Insurance – Special type of agreement– Heavily regulated

• Fire insurance• Increasing risk• Subrogation


Purchasing

• Every sales transaction is a contract• Public sector purchasing is complex

– Public bid process– Raises numerous ethical issues


Employment Agreements

• Employment relationship is a contract– At-will employees

• Due process– Fourteenth Amendment– Constitutional requirement for public employers


Due Process Issues

• Whether– Property interest attaches with expectation of

continued employment• How much

– Three-part balancing test (Mathews v. Eldridge, 1976)– Informal meeting versus trial

• When


Name-Clearing Hearing

• Due process requirement for all public employees– Liberty interest under due process


State Action Requirement

• Fourteenth Amendment’s requirement that people be afforded due process applies only to “state action”

• Private sector employers may not be subject to the due process requirements because they are not state actors


State Law Due Process

• State constitutions have due process requirements• May be interpreted more liberally than U.S.

Constitution


• State law may provide for hearings not required by due process– New York requires hearings for volunteer FFs

State Law Due Process


Workers’ Compensation

• Historical compromise– Strict liability of employer – Exclusivity of remedy for employee

• Employer required to provide insurance• Scope of workers’ compensation


Exceptions to Exclusivity

• Intentional• Reckless• Grossly negligent


Workers’ Compensation for Firefighters

• Some states exclude firefighters • Provide a similar compensation system that

parallels workers’ comp– Application of exclusivity


Summary

• Contracts• Promissory estoppel• Insurance• Employment agreements• Due process• Workers’ compensation

Contract Law and Employment Issues

Documents

thomson delmar learningexplain

thomson delmar learningbreach

thomson delmar learningvoid

thomson delmar learningoffer

contract state

sales contract

contract law

voidable contracts