Risks and liabilities could arise related to contract term

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Reference no: EM132209261

Background: Contracts are essential for business, and will be an integral part of GC operations, so the owners now want to focus on contract law. Each of the owners has experience with contracts in their own businesses, and appreciate the probable risks and liabilities associated with contracts.

The GC owners know that there are various types of contract agreements relevant to their business. For example, GC will have individual contracts with employees, independent contractors, and other agents who will represent the company. Also, GC will engage in sales contracts with other businesses, and sales contracts between businesses and consumers and clients. Furthermore, GC will use electronic contracts, or e-contracts, in conducting online business transactions.

To reduce risks and liabilities associated with contracts, the owners want all contracts to be written, with specific, complete, and clear terms. Contracts must define rights and responsibilities of the parties. Also, since employees and/or independent contractors will be performing cleaning services on clients’ properties, these contracts should consider bonding.

You, Winnie and Ralph presented draft contracts for several GC employees, including contracts for cleaners, office managers, marketing specialists, sales representatives, and IT employees.

The GC owners reviewed the drafts and have some questions about the contracts.

Instructions: At Winnie’s and Ralph’s request, it is your responsibility to research and provide answers to the GC owners’ questions.

The first questions relate to the GC cleaner-employee contract.

The cleaner-employee contract specifies the following terms and conditions:

• duties to be performed by cleaner-employee

• salary for cleaner-employee

• work hours

• terms of payment for overtime or holiday work, if any

• sick leave

• vacation

• training for cleaner-employee

• length of contract

• bonding for cleaner-employee

• periodic performance evaluation and how it will be conducted

• termination of contract, i.e., notice of termination, etc.

Research, evaluate, and respond to the owners’ questions about the contract terms below.

A. duties to be performed by cleaner-employees

1. What potential risks and liabilities could arise if the specific duties of cleaner-employees were not included in their contract with GC? Explain.

B. training for cleaner-employees

1. What possible risks and liabilities could arise related to this contract term that designates specific and required training for GC cleaner-employees?

2. Would the risks and liabilities be greater or less if GC did not train its cleaner-employees and hired only experienced cleaner-employees? Why?

C. bonding for cleaner-employees

1. What possible risks and liabilities could arise for GC if cleaner-employees were not required, specifically in their contracts, to be bonded? Explain.

Reference no: EM132209261

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