Contract Law and Employment Issues
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Transcript of Contract Law and Employment Issues
Contract Law and Employment Issues
Chapter 10
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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.
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• 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
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• 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
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Contract
• Mutual promises– Unilateral promise is not enough
• Consideration– Promise to do something one is already required to
do is not consideration
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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
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Contract Formality
• Contracts may be written, oral, or implied• Certain types of contracts must be in writing to be
enforceable
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• 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
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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
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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
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• Due diligenceresponsibility to take reasonable steps to make sure that the person signing the purchase and sales contract has actual authority
Authority to Contract
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• 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
Authority to Contract
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Void or Voidable Agreements
• Void– Cannot be enforced by either party– Against public policy
• Voidable– May be rescinded by one or both parties
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Capacity to Contract
• Age of majority• Mental impairment• Duress• Actual versus apparent authority
– Due diligence
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Promissory Estoppel
• Unilateral promise• Relied upon to detriment• Maker of promise knows of reliance• Equitable principle
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Fire Service Contracts
• Mutual aid agreements• Insurance policies • Purchasing • Employment agreements
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Mutual Aid Agreements
• Between communities and fire departments• Should address
– Expenses incurred– Liability– Reimbursement– Limitations
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Insurance
• Insurance – Special type of agreement– Heavily regulated
• Fire insurance• Increasing risk• Subrogation
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Purchasing
• Every sales transaction is a contract• Public sector purchasing is complex
– Public bid process– Raises numerous ethical issues
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Employment Agreements
• Employment relationship is a contract– At-will employees
• Due process– Fourteenth Amendment– Constitutional requirement for public employers
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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
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Name-Clearing Hearing
• Due process requirement for all public employees– Liberty interest under due process
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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
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State Law Due Process
• State constitutions have due process requirements• May be interpreted more liberally than U.S.
Constitution
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• State law may provide for hearings not required by due process– New York requires hearings for volunteer FFs
State Law Due Process
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Workers’ Compensation
• Historical compromise– Strict liability of employer – Exclusivity of remedy for employee
• Employer required to provide insurance• Scope of workers’ compensation
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Exceptions to Exclusivity
• Intentional• Reckless• Grossly negligent
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Workers’ Compensation for Firefighters
• Some states exclude firefighters • Provide a similar compensation system that
parallels workers’ comp– Application of exclusivity
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Summary
• Contracts• Promissory estoppel• Insurance• Employment agreements• Due process• Workers’ compensation