Contract Law and Employment Issues

1. Contract Law and Employment Issues Chapter 10

2. 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.

3. Objectives • 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.

4. Objectives • 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.

5. Contract • Mutual promises • Unilateral promise is not enough • Consideration • Promise to do something one is already required to do is not consideration

6. 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

7. Contract Formality • Contracts may be written, oral, or implied • Certain types of contracts must be in writing to be enforceable

8. Contract Formality • 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

9. 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

10. 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

11. Authority to Contract • Due diligenceresponsibility to take reasonable steps to make sure that the person signing the purchase and sales contract has actual authority

12. Authority to Contract • 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

13. Void or Voidable Agreements • Void • Cannot be enforced by either party • Against public policy • Voidable • May be rescinded by one or both parties

14. Capacity to Contract • Age of majority • Mental impairment • Duress • Actual versus apparent authority • Due diligence

15. Promissory Estoppel • Unilateral promise • Relied upon to detriment • Maker of promise knows of reliance • Equitable principle

16. Fire Service Contracts • Mutual aid agreements • Insurance policies • Purchasing • Employment agreements

17. Mutual Aid Agreements • Between communities and fire departments • Should address • Expenses incurred • Liability • Reimbursement • Limitations

18. Insurance • Insurance • Special type of agreement • Heavily regulated • Fire insurance • Increasing risk • Subrogation

19. Purchasing • Every sales transaction is a contract • Public sector purchasing is complex • Public bid process • Raises numerous ethical issues

20. Employment Agreements • Employment relationship is a contract • At-will employees • Due process • Fourteenth Amendment • Constitutional requirement for public employers

21. 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

22. Name-Clearing Hearing • Due process requirement for all public employees • Liberty interest under due process

23. 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

24. State Law Due Process • State constitutions have due process requirements • May be interpreted more liberally than U.S. Constitution

25. State Law Due Process • State law may provide for hearings not required by due process • New York requires hearings for volunteer FFs

26. Workers’ Compensation • Historical compromise • Strict liability of employer • Exclusivity of remedy for employee • Employer required to provide insurance • Scope of workers’ compensation

27. Exceptions to Exclusivity • Intentional • Reckless • Grossly negligent

28. Workers’ Compensation for Firefighters • Some states exclude firefighters • Provide a similar compensation system that parallels workers’ comp • Application of exclusivity

29. Summary • Contracts • Promissory estoppel • Insurance • Employment agreements • Due process • Workers’ compensation