The Canadian government has been taking steps to minimize the consequences of the economy, employees, and entrepreneurs.

All of these measures have economic, social consequences and require legal solutions. For example, many people are working from home, and many business owners are having problems with labor laws and employment contracts.  Also, sometimes, they are forced to do a breach of contract with the employees.

Definition of contract

By definition, a contract is a formal agreement entered into by the parties that establish the clauses that create and define the law.

For employment contracts, the contract formalizes issues such as workday to be completed and remuneration to be paid. If the employer fails to pay the remuneration, there is a breach of contract. It may also mean that an employee has breached one or more terms of the contract in the same situation.

Employment Contract

In an employment contract, terms and conditions of work are defined, for example:

• Rights and Duties of both parties
• Payment Fee
• Number of hours worked
• Vacation Terms
• Work responsibilities
• Non-compete or non-disclosure agreements
• Termination requirements
• Overtime requirements
• Confidentiality terms

In general, these terms are described in all employment contracts, but it is possible to include other specific clauses.

Breach of employment contract

Breach of any contractual obligation is known as Breach of Contract. Depending on the agreement, a breach can occur when one of the parties does not comply with the agreement’s terms.

Once a contract between employer and employee is signed, they cannot terminate their employment relationship outside the terms discussed in the agreement.

Breach of contract by the employee

None employer wants to experience a breach of contract. The employer invests time and resources in preparing and advertising vacancies and selecting the best employment.

When an employee leaves, the company needs to deal with embezzlement in the team that needs to be completed or expanded to ensure the goals are set. Depending on the embezzlement, it can represent a significant loss for the company.

If a breach of contract occurs, in addition to all the bureaucracy that the process involves, the company will probably have to face opening another process of selection, training, and adaptation of professionals.

Thus, in a breach of contract, the employee causes significant damage to the company. Depending on the contract’s situation, he may be penalized and pay compensation to his employer.

In these situations, a lawyer will assess the impacts of the breach of contract and the possible resources and indemnity amounts.

Breach of contract by the employer

Breach of an employment contract can also occur through the action of an employer.

In the event of a breach of contract by the employer, you must take some steps before taking legal action, such as verifying that you have a copy of the signed employment contract and analyzing whether the terms of the agreement have been breached.

Next, it is ideal that you try to discuss the situation with your employer. The breach of contract was often unintentional. That is, you can resolve the matter with a conversation.

If you cannot resolve the problem, you must seek a lawyer specializing in the matter even after diagnosing the contract’s breach and trying to have a friendly conversation.

A lawyer may try to make a new negotiation through mediation and arbitration or take legal action.

Remedies to Breach of contract

The first step is the recognition that a breach of contract has indeed occurred. The remedies to breach of contract will depend on what exactly was breached in the contract. In general, the possible solutions are:

• Out-of-court settlement: Given the Coronavirus situation is the impact that this causes in contracts; ideally, both parties seek common sense so that they can find common ground and promote an extrajudicial agreement.

• Judicial agreement: If the first attempt is invalidated, it is possible to make an action plan to fulfill the obligations described in the contract to be fulfilled.

• Mediation, arbitration, or conciliation: If the conflict is not resolved, a lawyer may use mediation, arbitration, or conciliation.

Do I need a lawyer to deal with the breach of contract?

An experienced litigation lawyer can help you analyze your contract and see if there has been a breach of contract. Also, the lawyer will be able to guarantee that your rights are guaranteed.

At Juzkiw law, we have experienced lawyers who can help you in civil litigation and employment law situations. Call us for more information.

Look at the crucial elements of a contract and make sure that somebody would not invalidate your Contract. 

What is a contract?

A contract, in the simplest of terms, is a promise. Though not every promise is legally enforceable, eg. a promise to attend your friend’s birthday party would not be legally enforceable, a contract is a promise that is legally binding and legally enforceable. Not all agreements are contracts, whereas all contracts are agreements. This would mean that in case of a breach of Contract by one party, the other party has a right to pursue the legal remedies arising from the breach of Contract.

A contract can be unilateral or bilateral;

• Unilateral – This is a contract made by a single party in exchange for some action against an unidentified person, such as declaring a reward to find a stolen item.
• Bilateral: Bilateral Contract, as the name suggests, is a contract entered into between two parties. These are the most usual forms of contracts.

Is an oral contract enforceable?

Yes, with some exceptions given under the Statute of Frauds, the Contract can either be oral or written. We enter into oral agreements almost every day, without even realizing it. Once such an example is when you place an order in a restaurant, you enter into an oral contract to pay the invoice for the ordered items. Realize that this agreement, even if oral, has the elements of a contract.

However, it is hard to prove the existence of an oral contract, and it is advisable to have a written agreement with all the elements of a contract for all the necessary transactions.

Statute of Frauds restricts the purview of oral contracts. It makes it mandatory to have a written and signed an agreement with all elements of Contract for the exchanges, actions, and contracts enlisted in the Statute of Frauds.

What are the elements of in Contract?

1. Capacity – A person who enters into a contract must have a legal ability to enter the Contract. For natural persons to enter into a contract, a person must have attained the age of majority, which is 18 years in Canada. The person must also be of a sound mind while understanding all elements of a contract and entering into it. If a party to the Contract is an artificial person such as a company or an estate, the capacity to contract rests with the person who has the authority to bind the company, estate of any other artificial person.
2. Offer – This is the manifestation of willingness to enter into a bargain with another party. This is usually the first step towards having a contract in place.
3. Acceptance – When an offer is accepted, there results in a contract. Acceptance is an unconditional willingness to be bound by request. Acceptance mirrors the conditions of the offer. If there is any variation communicated from the party to which the offer was earlier made, the communication would not be an acceptance but a counter-offer. In the counter-offer case, the party who initially made the offer is to accept or decline the counteroffer.
4. Consideration: There can be no contract without consideration. Consideration is something of value given in exchange for a promise. A contract would clearly state what is being sought, and for what consideration.  
5. Mutual Agreement: This is an essential element of a valid contract. For a contract to be valid and legally enforceable, the parties to the Contract must agree on the same terms in the same sense. If there is any confusion concerning any of the terms, article, or consideration, where the parties to the Contract interpret it in a different purpose, it could invalidate the Contract.  
6. Legality: For a contract to be valid and legally enforceable, the terms and elements of a contract should be legal in all aspects. The Contract should be for a legal objective, procured via legal means, and executed legally. Any illegality in the object, procurement, or execution might result in the Contract being void, which could not be legally enforced.

What if you did not intend to have a contract?

Not all agreements are intended to be legally binding. The court will consider the relationship between the parties to determine the intention to form a contract. It is advisable to consult a lawyer for an analysis of the purpose relating to the contracts.

On what other grounds can a contract be invalidated?

Some of the additional grounds where the Canada Court will not enforce the Contract are as under:

• Misrepresentation – Where one party intentionally misrepresents specific facts that are essential and material to the Contract.
• Mistake – Where there is a mistake, but unintentional. Suppose you believe something to be true when it is not, and that is no.
• Duress – When someone uses threats or violence to intimidate the other party to sign a contract.
• Undue Influence – When someone applies pressure on the other party to sign a contract.
• Frustration – Where the Contract cannot be performed for reasons beyond the control of the parties.

There may be some other grounds, which may depend on the facts of each case. A legal professional will be able to guide you better on all the bases—the essential elements of a contract and where the Contract can be invalidated if you need it.

What are your remedies in the case of breach of Contract?

As you know by now that the Contract can be legally enforceable, numerous remedies can be ordered by the court.

• Specific performance – The court can order the party to breach the Contract to perform their obligations as per the Contract.
• Monetary damages can be awarded to the innocent party.
• The court may order a party not to breach the Contract.
• The court may rescind the Contract and place the parties in a position as if there had been no contract. Rescission is a remedy often used where a contract is found to be voided, such as in cases of misrepresentation, mistake, duress, undue influence, or unconscionability.

If you need help to develop or review a contract, call Juzkiw Law Firm. We have expertise and knowledge about Canadian Law. We will help to include the correct elements of a Contract. Call us today – 416221-2221

Disclaimer – The information on this site is provided for informational purposes only and should not be construed as legal advice on any subject matter. It would help if you did not act or refrain from acting based on any content included in this site without seeking legal or other professional advice.