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An employment contract is used when an employer enters into a contractual relationship with a person to provide certain services as an employee. It’s an alternative to at-will employment. However, when an employer and employee enter into an employment contract, the relationship between the two cannot be ended for any reason, as can be done in an at-will employment agreement. Rather, the employment contract is usually written to cover a specific period of time (and it may be renewable) and the relationship may only be ended for reasons listed within the contract or because the contract was breached.
Employment contracts must include all of the components that make up a legal contract. There must be an offer, acceptance, appropriate consideration offered, mutuality of obligation, parties must be legally competent and possess the capacity to enter into a contract, and (in many instances) it must be in writing. Although there is no definitive obligation that exists for every employment contract to be in writing, putting it in writing sets it apart from at-will employment and it gives the involved parties written descriptions of the obligations that they agree to uphold as part of the relationship.Get started now ›
Basic items that should be defined in an employment contract include, but are not necessarily limited to:
The employment contract should be dated and signed by a representative of the company who has the capacity to hire as well as the new employee. Both parties should keep a copy of the employment contract for their records.