Contract Law: Key Elements & Interpretation

Essential Elements of a Contract

• Agreement: Includes both offer and acceptance.
• Consideration: Requires a mutual exchange of value.
• Capacity: Parties must have the legal competence to enter into a contract.
• Legality: The agreement must not violate the law.

Interpretations of Contract

• Rules of Construction is a method for interpreting contracts.
• Oral contracts versus written contracts can affect enforceability.
• Statute of Frauds may require certain agreements to be in writing.
• Disparity of Bargaining Power can affect the fairness and enforceability of a contract.
• Limitations on Authority of agents to contract can impact the principal's obligations.

Statute of Frauds: Sport Organization Agreements

• Agreements for the sale of land must be in writing.
• Contracts for the sale of goods costing $500 or more must be in writing.
• Contracts that cannot be performed within one year must be in writing.

Disparity of Bargaining Power

• One party dictates the terms of the contract.
• There is no opportunity for bargaining.
• A National Letter of Intent is an example.

Limitations on Authority to Contract and Capacity

• Principals are bound by the actions of their agents.
• Agents must act consistently with their authority.
• Actual versus apparent authority affects the principal’s liability.

Remedies for Breach of Contract

• Compensatory damages aim to compensate the injured party.
• Mitigation of damages requires the injured party to take reasonable steps to minimize losses.
• Specific performance requires the breaching party to fulfill the contract terms.
• Liquidated damages are damages agreed to in the contract.
• Rescission and Restitution involves canceling the contract and restoring the parties to their original positions.
• Promissory estoppel prevents a party from going back on a promise.

Competitive Advantage Strategies Overview of Contract Law

• Consider the worst-case scenario when drafting contract clauses.
• Ensure contracts align with the organization's interests.
• All contracts should be put in writing.
• Avoid making promises beyond the written agreement.
• Enforce the limits of actual authority.

Types of Employment Arrangements: Employment at Will

• The employer can terminate employment at any time for any reason (or no reason).
• Employees can quit at any time for any reason.
• This rule typically favors employers.

Exceptions to Employment at Will: Public Policy

• Discrimination is an exception.
• Whistleblowing is an exception.
• Cooperation in investigations against the company is an exception.
• Filing unfair labor practice charges is an exception.
• Reporting safety hazards/violations is an exception.

Competitive Advantage Strategies of Employment at Will

• Personnel manuals should be developed carefully.
• Language in employment contracts should be consistent.

Contractual Employment Agreement: Basic Job Details

• Written or verbal: Includes start date, salary, job duties, and duration.

Standard Provisions in Employment Agreements

• Include term (duration), duties and responsibilities, termination clauses and termination without cause
• Compensation clauses should be included.
• Liquidated Damages and Wrongful Termination conditions should be included.

Additional Issues in Coaches' Employment Agreements

• Important unique provisions should be implemented.
• Mitigation, reassignment, and restrictive covenant clauses should be included.
• Moral clauses, NCAA requirements, dispute resolution and separate agreements should all be considered.

Tort Theories and Employment

• Defamation can occur in the workplace.
• Negligent Misrepresentation/Fraud can occur during employment.
• Tortious Interference with Contractual Relations can also occur.

Employer Liability: Vicarious Liability

• General Principle: Respondent superior (Let the master answer).
• Employer is only liable for employee actions within the scope of employment.

Intentional Acts of Violence by Employees

• Most acts of violence are outside the scope of employment.
• Exceptions: excessive zeal in competition, plus sexual harassment and assault.
• Ratification/condonation by the employer can create liability.

Employment-Related Negligence

• Primary negligence refers to the employer's negligence in making employment-related decisions.
• The "Reasonably Prudent Manager Standard" applies.

Liabilities for Acts of Independent Contractors

• Employers typically are not liable for the acts of independent contractors.
• Hiring independent contractors avoids vicarious liability.
• Factors determining independent contractor status:
  • Control over the work.
  • Is the contractor in a distinct occupation?
  • Who supplies the tools and workplace?
  • Method of payment.

Discrimination

• Discrimination based on race, sex, age, and religion are illegal.
• Title VII prohibits employment discrimination.
• It includes hiring, firing, layoff, and job training discrimination.
• Protected classes under Title VII are specified.
• Title VII does not apply to independent contractors or certain groups.

Title VII Remedies

• Remedies include back pay and front pay.
• Remedies include reinstatement of employment.
• Remedies include retroactive seniority, injunctive relief, and attorney's fees.
• Remedies include compensatory and punitive damages.

Theories of Liability When Deciding Title VII Cases

• Disparate Treatment: Requires intentional discrimination.
  • Proved with direct evidence or through inference from circumstances.
  • Burden-shifting/McDonnell Douglas Test is used.
• Disparate Impact: A neutral employment practice has a discriminatory effect.
  • There is a "statistical evidence" of intent.
  • Burden-shifting/McDonnell Douglas test is used.

BFOQ Defense (Bona Fide Occupational Qualification)

• Defense is available in gender, national origin, and religious discrimination cases.
• Defense is not available for discrimination based on race/color.
• Employers must show that discrimination was justified.
• Members of the excluded class could not perform essential job functions effectively.

Title IX

• This relates to sex-based discrimination in education programs and activities receiving federal financial assistance.

Age Discrimination in Employment Act (ADEA)

• Forcing retirement, including age preferences in job ads, should be avoided.
• Assigning older workers to jobs that didn't allow them to compete should be avoided.
• Promoting a younger worker because an older worker may be planning to retire should be avoided.
• Hiring a younger worker over a better-qualified worker should be avoided.

ADEA Legal Analysis and Defense

• Courts analyze claims similar to Title VII disparate claims.
• Additional Defenses: good cause, and BFOQ.
• Additional Defenses: reasonable factors other than age, and seniority.

Disability Discrimination: ADA Claims

• Elements of a claim: the plaintiff has a covered disability impacting major life activities.
• Elements of a claim: the plaintiff was discriminated against, and no reasonable accommodation was made.

Covered disabilities

• Physical or mental impairments along with infectious and contagious diseases.

Overview of Harassment in the Workplace

• Sexual harassment, racial harassment, and same-sex harassment can happen in the workplace.
• Employers are liable for harassment within the workplace.

Sexual Harassment: Quid Pro Quo

• Quid Pro Quo = This For That: A form of sexual harassment
• Job-related benefits should not be conditioned on sexual behavior.
• Sexual bribery or a single act can result in liability.

Sexual Harassment: Hostile Environment

• Hostile Environment Harassment is difficult to prove.
• An employee must be subjected to repeated and unwelcome behaviors that are sufficiently severe and pervasive.
• The aim is to create a work environment that sustainably interferes with the ability to perform their job.

Conduct Contributing to a Sexually Hostile Work Environment

• Unwelcome touching, pinching, or patting can create a hostile environment.
• Whistling or cat-calling should be avoided in an office.
• Sexually suggestive or obscene communications should be avoided.
• Leering or sexually-oriented gestures are inappropriate.
• Display of sexually suggestive materials, obscene jokes or vulgar language can create a hostile work environment.

Racial Harassment: Hostile Environment Standard

• An employee is subject to repeated and unwelcome behaviors.
• These behaviors need to be severe and pervasive.
• This creates a work environment that is substantially interferes with ability to perform their job.

Racial Harassment: Objective and Subjective Tests

• Subjective: The harassed person perceives the environment has racial hostility.
• Objective: A reasonable person must conclude the actions were bad enough to create an abusive work environment.

Employer Liability for Harassment: Strict Liability

• Strict Liability applies when the employer knew or should have known.
• It is most common in Quid pro quo harassment situations.

Employer Liability for Harassment: Vicarious Liability

• Vicarious Liability occurs when liability can be based on the employee's negligence.
• A defense can be raised if the employer had a harassment policy.
• It is important to take responsible steps to eliminate harassment once it was reported.

Essential Elements of a Harassment Policy

• Implement a Philosophy of zero tolerance.
• Clear definitions of sexual, racial, and religious harassment with examples.
• Implement clear reporting procedures.
• Ensure Discrimination of the investigative process.
• Discrimination of sanctions or disciplinary actions should occur.
• Implement an appeals process should be included.

Competitive Advantage Strategies: Sexual and Racial Harassment

• Adopt measures to prevent harassment.
• Ensure compliance with workplace laws.
• Ensure protection for employees.
• Define the illegal activities.

Key guidelines

• Ensure that the employee is safe, and legal requirements are met

Employee Expressions That May Provoke Adverse Employment Actions

• Seeking Justice or Whistleblowing should be managed properly.
• Ensure dress/grooming codes are legal.

Employee Speech and the First Amendment

• Private employers can restrict employee speech.
• Federal and state government employees has some freedom of speech.
• One can speak on matters of public concern

Pickering Analysis: Matter of Public Concern

• Threshold Question if it is a matter of public concern.
• One should determine if the speech focuses on the public.
• Speech made during the context of their duties is not a matter of public concern.

Religious Speech and the First Amendment: Free Exercise Clause

• Safeguards the fundamental right to freely practice one's religion, unless those beliefs cause harm to others.

Religious Speech and the First Amendment: Establishment Clause

• Forbids the creation of government-sponsored religion.
• The government is neutral with respect to religious matters.

Team Prayer: Free Exercise Clause

• It Protects athlete's and coach’s private expression

Team Prayer: Establishment Clause

• Requires the coach to remain neutral.

Reasonableness of Religious Accommodations

• Employers are required to make reasonable accommodations in terms of employee religious practices.
• Several factors such as size of staff, administrative burdens, and cost are considered.
• Consider Employee’s Job and what has been done by similar others.
• Assess if other employees were asked for their assistance.
• Willingness of others to accomodate is important

Explore the essential elements of a contract, including agreement, consideration, capacity, and legality. Understand contract interpretations, focusing on oral vs. written contracts and the Statute of Frauds. Learn about the impact of bargaining power and agent authority.