Unit 202 Business Law Assignment - Contract Law

UNIT 202 – BUSINESS LAW

LECTURER NAME

DR. ZAHRA

TOPIC NAME

Consideration of a contract for an Offer letter to an employee from the

organization

SUBMISSION DATE: 14-09-2013

STUDENT NAME: SYED ABBAS

STUDENT ID: 861769

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UNIT 202 – BUSINESS LAW 1

EXECUTIVE SUMMARY

In this report we are going to discuss the consideration of a contract for an offer letter to an

employee from the organization. We will study why offer letter is required for any employee and

what does this offer letter do. How can we make an offer letter? What are the things which we

should keep in mind while making an offer letter as an organization and what are the things

which we should keep in mind as an employee to accept the offer letter. Employee is the offer‟ee

and organization is the offer‟ or without these two the contract is not possible to take place

because there should be someone who accepts it and there should be someone to offer it.

There are many issues while making a contract and putting it in front of an employee. The main

thing is to bring the management to solve the issues between the two parties. management can

play a role to secure the rights for employee such as dispute clause in not in the contract.

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TABLE OF CONTENT

EXECUTIVE SUMMARY…………………………………………………. PAGE 1

INTRODUCTION…………………………………………………………… PAGE 3

OFFER AND ACCEPTANCE PHASE OF CONTRACT……………………PAGE 5

SUBJECT MATTER AND PROPERTARY RIGHTS……………………….PAGE 6

TERMS AND CONDITIONS OF THE CONTRACT………………………..PAGE 9

DISPUTES IN CONTRACT………………………….……………………...PAGE 10

CONTRACT MANAGEMENT PRACTICES………………………………PAGE 10

CONCLUSION……………………………………………………………....PAGE 11

REFERENCES……………………………………………………………... PAGE 12

APPENDIX…………………………………………………………….……PAGE 13,14

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INTRODUCTION

Abu Fahad Food stuff is a distribution company for FMCG products. Abu Fahad Food Stuff was

to be an organization fully dedicated to the sales and distribution of high quality fast moving

consumer goods. In this respect, the Company would represent leading multinationals with

product lines and brands that address the needs of local consumers, offering excellent value for

money and real consumer satisfaction with significant growth potential.

The organization chooses there employee after looking at their past experience and their ability

to communicate and to deliver what the organizations requirement are. After knowing everything

of the employee organizations makes an offer to them. (Coatie, 2008, p.70).

In this report we are going to discuss the consideration of a contract for an offer letter to an

employee from the organization. We will study why offer letter is required for any employee and

what does this offer letter do. How can we make an offer letter? What are the things which we

should keep in mind while making an offer letter as an organization and what are the things

which we should keep in mind as an employee to accept the offer letter. Employee is the offeree

and organization is the offer or without these two the contract is not possible to take place

because there should be someone who accepts it and there should be someone to offer it.

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CONTRACT

“A contract is an agreement that gives rise to legal obligations which are both recognized and

enforced by the law.” Before considering the essential elements required creating a contract, we

will discuss the ways in which contracts can be classified. Contracts can be classified according

to their:

Validity........

We can classify contracts into different category such as:

Formal contracts. . . . . . . . . .

Here we will discuss little about formal contract because our report is based on formal contract

FORMAL CONTRACTS

Some contracts do not require being valid as long as they are in a particular form. Consideration

is something done or promised to be done by one party in exchange for something done by the

other party. Formal contracts are enforceable only because they follow a prescribed form. (Robert

and Thomson et. al., 2013.)

BACKGROUND AND SUBJECT MATTER OF THE CONTRACT

The contract is an offer letter for an employee. The contract must be read carefully before

signing it. For both the employee and the organization must be very clear about the terms and

conditions applied in the contract. This is the only thing which can help organization or

employee to take an action in a critical situation of their relationship. The subject of this contract

is pretty clear it‟s an offer letter and in offer letter they are so many things which can be entitled.

Mostly organizations are offering an employee a job in their organization with a clear conditions

and warranties. If an employee doesn‟t wants to accept the conditions which organization is

mentioning in the contract, then they can easily discard the offer..................

“Upon termination of your services (other than dismissal by the company) you will be entitled to

receive a service indemnity calculated in accordance with Article 132 through 141 of the federal

labor laws.” (William & James et al., 2010, p. 245)

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IDENTIFICATION AND NATURE OF PROPRIETARY RIGHTS

“The law divides property into two majors‟ categories real property and personal property.”

(Peter 2010). Real property is land and items attached to the land. Personal property is all that is

not real property. Here we will talk about personal property which is not real property and in

other words

We can call it an INTELLECTUAL PROPERTY. What is intellectual property, and how does

the law control it? Intellectual property is the legal right that relates to intangible property. The

term „intellectual property‟ (IP) covers a variety of categories. These are:

Copyright

Design

Patent. . . . . . . . .

Intellectual property differs from other types of property in that it is not capable of being

possessed like tangible items of personal property. Nor is it capable of being occupied in contrast

to real property.

In this contract organization clearly asking an employee to agree and undertake not to disclose,

release or dispose any type of information he gathered from the organization to any other

organization or competitor of the organization for a minimum period of 10 years. Suppose if an

employee comes to know about the prices of a products which the organization dealing in so he

can‟t disclose the prices unless or until authority itself tells him to disclose it. Here is another

example of intellectual property which organization is trying to mention in the agreement, that

the employee should take care of all the other information which company is providing to it like

what are the seasonal offers, how organization deals with the key accounts or big supermarkets,

what are the payment terms and how to collect the payments from the accounts. So these are the

information which should not be disclosed to any other organization to harm this organization.

Appendix 2 Clause number 16 clearly mention about the intellectual property. “ I agree and

undertake not to disclose, release, or dispose in whole or part thereof, or in any form, or manner,

any information I have gathered or acquired during my work, individually, or as a team member

in the projects or in any contracts, or during my normal course of work to any person, body, or to

fellow staff, without the prior written approval of the concerned authority and shall treat all

information as confidential.

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I also agree and acknowledge that this undertaking survives for a minimum period of 10 years

and that any unauthorized disclosure or disposition of the information will significantly harm

Abu Fahad Food Stuff.” (Alex, 2010, p.79).

CONDITIONS AND WARRANTIES OF THE CONTRACT

“Some terms of the contract are so important that their breach would entitle the injured party to

terminate the contract and sue for damages. Such terms are usually referred to as Conditions.

Other less important terms would usually entitle the injured party to sue for damages, rather than

terminate the contract. Such terms are referred to as Warranties.” (Zahra, 2013, Guide to Business

Law, Chifley Business School pp.58).

The conditions in this contract are Appendix 3 clause number:

4 “Your probationary period will last for the first 6 months of your employment, during which

the company reserves the right to terminate your contract with notice of a minimum of 24 hours”

if employee won‟t work according to the organization expectation in this probation period then

organization has a complete right to terminate him with in the notice of 24 hours.

The warranties in this contract are Appendix 4 clause number:

This contract will be in effect from the day of commencement of work. In order to terminate this

contract you must give at least 30 days‟ notice in writing.” if employee doesn‟t wants to sign up

for this contract then they should give written notice which will not harm the employee or

organization.

Policies and procedures laid down in our personal memoranda issued from time to time and the

instructions of the management. In addition, you will be expected to conduct yourself in a

manner that will not prejudice our organization, its good order and good name, or the wellbeing

fellow employees.” Employee should have a professional attitude while working if they doesn‟t

show the professional attitude then they will face some kind of punishment which is not going to

be terminating the contract, rather than deducting salary or a warning letter.

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If you resign before three years, the cost of the visa, air tickets, training etc. whatever direct costs

spent on you, should be reimbursed to the company, after deducting the proportionate period of

your employment period.” if employee wants to resign before the completion of his 3 years

contract then the employee needs to pay the expenses which organization endure while he/she

was in bound with the organization.

DISPUTE IN CONTRACT

“It‟s imagined as the part of every deal or contract that when the two parties are working

together disputes arise often between them, but to resolve these problems and issues contract

must have clause in them so when any such matter occur the parties can follow the decided

terms. If there is no dispute clause mention in the agreement, it is commonly assumed that the

parties aim to resolves any disputes arising from the contract by legal action.” (Peter and Thomson

et al., 2011, p. 248 ...................

CONTRACT MANAGEMENT PRACTICES

As it‟s known that the contracts are the important part of every company important part the

management and tackling of these contracts are also as important as that. There are different

practices and rules which are used for the management of contract and making its terms and

clauses more define and detailed for the other parties to understand them easily.

Terms and clauses must be presented with right skills. as these points will help to reduce the risk

of any legal complications or else the issues will be arose which will end in by legal actions and

courts.

Furthermore the management should be careful while making the contract. The contract is the

base of any legal or official relationship which should be clear in all the aspects. In this contract

the management should mention the dispute clause as well so that there won‟t be any problems

between the two parties.....................

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CONCLUSION

In this report we have discussed the consideration of a contract for an offer letter to an employee

from the organization. We studied why offer letter is required for any employee and what does

this offer letter do. How can we make an offer letter? The things which we should keep in mind

while making an offer letter is to take care of all the legal aspects for the benefits of both the

parties. Employee is the offer‟ee and organization is the offer‟or without these two the contract is

not possible to take place because there should be someone who accepts it and there should be

someone to offer it.

The changes which should be take place in the contract is to introduce the dispute clause to solve

the issues between two parties where they can discuss the problems. Management should take

the interest while making an offer letter because there are so many conditions which is in favor

of the organization rather than the employee. Management role is very important to prepare a

legal and effective contract which can be beneficial for both the parties................

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REFERENCES

Adams, R. and Coatie, 2008, The Business Law Theory & Practice. London: Perseus, pp. 70-72.

Book of Ethics, 2013. Business Law Report. [pdf] London Available at:

<http:/www.businesslaw.co/publication.pdf> [Accessed: 12, Sept 2013]

Boughton, J.M., 2010. The Bretton Woods Proposal: Business Law, 42(6), p. 364. [Accessed:

12, Sept 2013]

Cite this for me. 2011. Cite a Website in Business Law, Harvard, Available at:

http://www.citethisforme.com/cite/website [Accessed: 12, Sept 2013]

Zahra, 2013, Guide to Business Law, BD45001S Management. Chifley Business School ,

unpublished.

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APPENDIX

APPENDIX 1 (subject matters):-

14 terminal gratuities

Upon termination of your services (other than dismissal by the company) you will be entitled to

receive a service indemnity calculated in accordance with Article 132 through 141 of the federal

labor laws.

APPENDIX 2 (proprietary rights):-

16 Confidentially

I agree and undertake not to disclose, release, or dispose in whole or part thereof, or in any form,

or manner, any information I have gathered or acquired during my work, individually, or as a

team member in the projects or in any contracts, or during my normal course of work to any

person, body, or to fellow staff, without the prior written approval of the concerned authority and

shall treat all information as confidential.

I also agree and acknowledge that this undertaking survives for a minimum period of 10 years

and that any unauthorized disclosure or disposition of the information will significantly harm

Abu Fahad Food Stuff.”5

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APPENDIX 3 (conditions):-

4 Your probationary period will last for the first 6 months of your employment, during which the

company reserves the right to terminate your contract with notice of a minimum of 24 hours.

13.5 You agree that you will not work paid, or unpaid in the U.A.E, through any other company

who are direct competition to us for 6 months after terminating of your contract with us.

“13.6 You confirm that you will work with the company for a minimum period of three years

from the date of joining (this includes your probationary period). Should you resign before such

time, you will agree to pay a penalty equivalent to three months of your last drawn salary.

APPENDIX 4 (warranties):-

3 This contract will be in effect from the day of commencement of work. In order to terminate

this contract you must give at least 30 days‟ notice in writing.

13.2 Policies and procedures laid down in our personal memoranda issued from time to time and

the instructions of the management. In addition, you will be expected to conduct yourself in a

manner that will not prejudice our organization, its good order and good name, or the wellbeing

fellow employees.

13.7 If you resign before three years, the cost of the visa, air tickets, training etc. whatever direct

costs spent on you, should be reimbursed to the company, after deducting the proportionate

period of your employment period.

Documents

Unit 202 Business Law Assignment - Contract Law