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What Employers Should Know About Implied and Oral Contracts

By Edited Jul 29, 2015 0 0

An employment contract is important for an employee because it tells him almost everything he needs to know about his job. But sometimes, written contracts are not enough for employees. Some of them want to get more proof and details about their job so much that they disregard the contract and look for other "reliable" sources of information. This is where the problem begins.

If an employer is not aware, he might create an implied or oral contract with his employees. An implied contract is an indirect agreement that may have been stated in the employment contract or was spoken by the employer, but was not intended to mean that way. Other implied contracts can also be communicated verbally, which is why they are sometimes called oral contracts.

If you are an employer and you do not want to create such contracts with your employees, you should know which statements can be considered implied contracts, and which are not. Here are some examples to help you out:

  • The employment contract says employees will ONLY be terminated if they do not perform well at work.
  • An employer commends an employee for a job well done and tells him "you would not be fired if you continue to work that way".
  • An authorized company official tells an employee that there will be an automatic salary increase upon his regularization.
  • The contract says workers would not be punished if they commit a company violation for the first time.

These are just some simple examples that may create an implied contract between the employer and employee. If you have already made such mistakes, you can still explain them to your employee and correct them before he sees them as an implied contract. The following are other things you should take note to avoid making an implied contract:

  • Have a lawyer check your employment contract, as well as the company manual before giving them to your employees.
  • If you have made an oral contract, make sure not to write it on paper. Oral contracts can easily be nullified for lack of proof.
  • Think over what you want to say before actually saying it.

Implied contracts mean problems for employers like you. That is why it is important that you become aware of this issue before it haunts you sooner or later. If you need more information regarding implied and oral contracts, you can ask legal help from an Los Angeles employment lawyer.

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