Fabulous Hotel Scenario
Suppose that the Fabulous Hotel hires you as head chef under a two year employment contract. After two years, another hotel wants to hire you. However, in the original employement contract you signed with the Febulous Hotel the followinig paragraph appears
The below signed agrees not to work as a chief for another hotel in the same metropolitan area for a period of two years after leaving our employment.
- Describe and analyze the five elements of a contract that must exists for this agreement to be enforceable.
- Explain why this contract is governed by common law or the Uniform Commerical Code ( UCC).
- Examine at least two circumstances in which this non compete agreement would be unenforceable.Four to five pages APA formatted must cite three scholary sources.
Essential Elements Of An Enforceable Contract
Fabulous Hotel recruits me to work as its head chef based on an employment contract running for two years. With respect to the contract, I am the offeree while Fabulous Hotel is the offeror. After working for Fabulous Hotel for two years, I find out that another hotel is interested in hiring me. Even then, in the contract that I signed I agreed not to offer chef duties to any of the Fabulous Hotel’s competitors within the metropolitan hosting Fabulous Hotel for two years after leaving its employment. That means that the contract is a non-compete agreement (Beatty & Samuelson, 2015; Miller & Jentz, 2010). This essay explores the elements that ought to be present for the contract to be legally valid, or enforceable. The essay examines whether the contract falls under the UCC (Uniform Commercial Code) or falls under common law.
There are diverse contract elements that ought to exist for the contract between the Fabulous Hotel and the offeree to be lawfully enforceable. First, it ought to be evident in the contract or assumable that both the offeror and offeree intend to put in place a contract that is lawfully binding. In the contract, it ought to be clear or assumable that either of the contract’s parties can bring claims to the court against the other for failure to accomplish its obligations under the contract (Beatty & Samuelson, 2015; Miller & Jentz, 2010). Notably, the presumption that both the parties have it in mind to put in place a contract that is lawfully binding is only disallowed where the parties affirm particularly that they do not intend to put in place a contract that is lawfully binding.
Second, the contract can only be enforced legally if contains lawful offers. Offers are expressions of willingness to act in particular ways that give rise to contracts if tagged along by the unqualified approval, or acceptance, of the other parties to particular contracts. In the case of the contract between Fabulous Hotel and the offeree, a time restriction for the offer therein is specified, a two-year period (Miller & Jentz, 2010). Notably, some contracts do not specify the time limits for the offers made in them. It is legally assumed that the offers remain legally binding for evenhanded periods before being cancelled or revoked by the offerors (Beatty & Samuelson, 2015).
Third, the contract between Fabulous Hotel and I can only be enforced legally if the latter accepts the offer made by the former. In most cases, contract offerees accept the offers made in writing. In some cases, contract offerees accept the offers made orally. Some contracts allow for the simultaneous performance and acceptance of the duties, or offers, specified in them. With respect to such contracts, offerees can accept the offers made to them via conduct.
Notably, if an offeree only accepts some components of the offers made, the contract is deemed legally invalid (Beatty & Samuelson, 2015). That means that a contract is only legally binding when the offers made in it are all accepted unreservedly. When an offeree accepts the offer in a contract partially, he or she is legally deemed to have made placed a counteroffer. In employment and businesses settings, successive counteroffer s may be made by offerors and offerees prior to the coming out of the ultimate acceptance (Miller & Jentz, 2010).
Fourth, the contract between Fabulous Hotel and I can only be enforced legally if the element of consideration is evident in it. In the law of contract, consideration denotes a disadvantage to the party or parties making promises in given contracts or the benefits, or advantages, given to other parties to the contracts. Notably, the advantages and the detriments ought to be quantifiable based on economic terms.
Some of the commonest considerations in the law are services, money, and goods. With respect to any given contract, consideration may be insufficient without necessarily allowing offerees to launch claims for the corresponding shortfalls (Miller & Jentz, 2010). When a given contract is not enforced in a deed form, any gift promises in it are can not be enforced lawfully since there would be no mutual consideration exchange.
Fifth, the contract between Fabulous Hotel and I if it can be only be enforced legally if it is evident that at the time of signing the contract I and the hotel had the capacity or ability or authority to make it. Lunatics and minors are devoid of such legal capacity. When a party that is devoid of the capacity enters into any contract, the contract is voidable (Miller & Jentz, 2010).
With regard to the contract, any party requiring protection is allowed to seek out to steer clear of the related contractual liability (Beatty & Samuelson, 2015). That rule holds in all cases save for when a party that is devoid of the capacity enters into a specific contract for necessities, or necessaries, which are services or even goods that are essential to a minor’s life condition. If minors fail to meet their payment obligations with regard to the necessaries, those supplying the necessaries can sue them.
Contracts and UCC versus Common Law
Any given contract falls under either the general UCC law body or the general common law body (Beatty & Samuelson, 2015). Owing the dissimilarities between the two sets of law, the contracts falling under either of them have marked differences especially regarding their enforcement and outcomes of the disputes based on them. The law under which a contract falls influences the related collection of punitive damages and the determination of whether the contract should be modified or discharged (Miller & Jentz, 2010). It as well influences the ability to sue when the contract’s provisions are breached and the determination of the contract’s validity. The contract between Fabulous Hotel and I falls under common law.
Especially, the contract between Fabulous Hotel and I falls under common law since it relates to employment (Miller & Jentz, 2010). Contractual transactions that are governed by common law relate to employment, intangible assets, real estate, insurance, and services. Contractual transactions that are governed by the UCC involve tangible objects as well as goods. The common law requires that in a contract, the contractual acceptance be precisely comparable to the offer’s terms for the contract to be considered valid (Beatty & Samuelson, 2015; Miller & Jentz, 2010).
If the offer is changed, acceptance is impossible and viewed as a counteroffer or a rejection. On the other hand, if a contract is UCC-governed, contractual acceptance need not be precisely comparable to the offer’s terms for the contract to be considered valid as long its effect on the contract is not material (Miller & Jentz, 2010). The UCC principally zeroes in on quantity but the common law principally focuses on varied issues, including those relating to character of the work, performance time, price, and quantity.
When is a Non-Compete Agreement Unenforceable?
Essentially, the contract between Fabulous Hotel and I is a non-compete agreement (NCA). NCAs are employee-employer contracts in which employees accept not to offer labor to the employers’ competition for specified periods after discharging the employees (Miller & Jentz, 2010). Different states have different NCA laws as well as rules regarding the degree of the enforceability of NCAs (Epstein, 2007; Epstein, 2009). There is a high likelihood that the courts will find the NCA between Fabulous Hotel and I may be unenforceable for lacking consideration if the hotel gave the NCA to me to sign after I had started working for it and did not grant me extra benefits or payments for agreeing to its terms (Lagesse & Norrbom, 2006).
As well, there is a high likelihood that the courts will find the NCA between Fabulous Hotel and I may be unenforceable or ineffective if Fabulous Hotel is within a state that has legal limitations against NCAs’ enforcement (Epstein, 2007; Lagesse & Norrbom, 2006).Notably, there are a significant number of states that have placed limitations on NCA enforceability since they view them as interfering with employees’ elementary capacity for earning their living by working (Epstein, 2007; Epstein, 2009). Such limitations commonly restrict the geographical regions where employees are not allowed to offer labor to competitors. They as well limit the time frames when NCAs remain in force with respect to particular employees.