A mere agreement with Fabulous Hotel does not constitute an enforceable contract. The contracts must have five elements. These elements constitute legally binding contracts preventing any future conflicts or litigation. The first element is the parties involved in the contract agreements. The parties must be adults and mentally sound persons. Any contract entered with a minor is unenforceable. Also, the contract must have details on the parties entering into the contract (Seaquist, 2012), for instance, their full names, addresses, and titles. The second element is consent. All the parties involved to the contract should be free and communicate their agreement to the terms and conditions. However, the contracts could be unenforceable if the consent was obtained under duress, undue influence or fraud among other related circumstances. Thus, the parties must have a mutual consent on the details of the contracts (Gitman, & McDaniel, 2008). Consent also indicates the process of making an offer, free acceptance, and communication between the parties.
A third crucial element in making the contract enforceable is object. There must be a certain subject matter to be agreed on by the parties. The subject matter in question should be lawful and well defined in the contract. For instance, the law courts would not enforce a contract that deals with an illegal activity and subject, such as illegal gun trade. The fourth element is consideration. All valid contracts require considerations meaning the expected benefits from the contract. In this case, the head chef would agree to a certain monthly salary with Fabulous Hotel. The salary constitutes the consideration from the contract entered with the Hotel. The last element is that the contract should be in writing or verbal. Most valid contracts are expected to be in writing, although verbal contracts are enforceable. The written contracts provide detailed information on the agreements between the parties with certainty. Also, it can be noted that the written contracts are signed by both parties to confirm their objectivity to the agreement (Seaquist, 2012). As a result, five elements of a contract must be met to constitute an enforceable contract.
The common law governed the contract between Fabulous Hotel and the head chef. The terms and conditions specified in the initial agreements between the parties cannot be changed. The head chef had to wait for two years in order to work in another hotel in the same location. The Uniform Commercial Code (UCC) is not too restrictive compared to the common law. Thus, it allows for flexibility in the formation of the contracts. The common law requires that a contract is being signed after one party makes an offer, which is accepted by the other party for consideration. In our case, the provisions of common law governed the contract. Also, the contractual agreements related to services, insurances, and employment are governed by the common law (Mann, & Roberts, 2013). On the other hand, the UCC is involved in the contractual agreements related to tangible objects, for example, the purchase of land. The contract also had some agreed period and terms. The head chef had agreed not to work for another hotel for two years after leaving the hotel. The contractual description matches the requirements of the common law for inclusion of quantity, price, and identity of an offer.
However, the contracts governed by UCC are only required to specify the quantity. Moreover, the contract above is governed by the common law as it met three essential elements of valid contract. They include offer, acceptance, and consideration. An offer gives the parties an opportunity to assess the terms and description of the subject. The acceptance was done clearly to indicate a contractual bond between the parties. The third aspect of valid contract is consideration. It explains the value to be exchanged between the parties into the contract (Miller, & Jentz, 2011). Both the head chef and Fabulous Hotel fulfilled the provision of common law and thus, created a valid contract.
In determining the enforceability of non-compete agreements, the court examines balance between the interests of business and the freedom of employees to gain job in other firms. The interests of both parties must be protected by enforceability of non-compete agreements. There are various circumstances, under which non-compete agreements would be unenforceable. First, nature and character of the employment contract is a relevant factor. It examines the level of access the workers had to the trade secrets of their employers (Seaquist, 2012). If the employee did not have much access to the employer and customers’ trade secrets, the non-compete agreement would be unenforceable. In most occasions, the lower-levels employees have minimal knowledge on the sensitive information of the business. Second, time and geographical restrictions would make the non-compete agreements unenforceable. The courts usually consider the reasonability of restrictions agreed with the employer (Beatty & Samuelson, 2007). The court could provide for the period taken for the business to obtain replacement for the leaving employee. As a result, geographical coverage and period under consideration usually affect unenforceability of non-compete agreements.
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Another point that could make the agreement unenforceable is determination is whether the non-compete agreements are under appropriate consideration. The factor implies whether the employees would benefit from the non-compete agreements with the current employers. Thus, if the non-compete agreement was signed during employment, the employees should be given something more to benefits (Seaquist, 2012). The court only focuses on the presence of consideration, but it does not evaluate whether it is sufficient. Therefore, geographical restriction, time limitations, and consideration would limit the enforceability of non-compete agreements.
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