What is in a labour contract?

By Burnett Munthali

We had an emergency meeting during lunch hour at my work place and I didn’t know exactly what it was all about. The first thing which came to my mind was that our immediate boss had something of great importance

Employment contract

The contract typically provides for salary or “base compensation” and benefits. Salary is guaranteed at “no less than” a set amount, and the parties sometimes agree that the employee will be eligible for annual salary increases.

To be legally enforceable, an agreement must contain all of the following criteria: An offer and acceptance; Certainty of terms; Consideration; An intention to create legal relations; Capacity of the parties; and, Legality of purpose.

The key characteristics of a labor contract should specify: the time when the work begins, the duration of any temporary contract and the reason why it is temporary, the length of any agreed trial period, the place of work, the main duties of the employee, and the collective agreement that applies to the work.

The 5 essential characteristics of contract are offer, acceptance, awareness, consideration, and capacity. An agreement’s “why”, or contract terms, are spelled out in its offer, which outlines what each party commits to do or not do as part of the agreement’s conditions.

Employment agreement lays down the terms of employment, agreed upon by the employer and employee. Whether stated explicitly in the agreement or not, both the employee and the employer have the duty of mutual confidence and trust, and to make only lawful and reasonable demands on each other.

There are four essential elements of forming a contract: offer, acceptance, consideration, and intention to create legal relations. Beyond this, the terms of the contract must also be unambiguous, and the parties must have the mental capacity to agree.

A contract can be terminated. You can void most contracts if one of the other parties has failed to honor their established obligations. If you can identify and prove a breach of contract, you can terminate the agreement.

In fact, I’ve seen contracts that are less than one page in length, in plain English, and still legally binding. Generally, to be legally valid, most contracts must contain two elements: All parties must agree about an offer made by one party and accepted by the other.

Something of value must be exchanged for something else of value. This can include goods, cash, services, or a pledge to exchange these items.


Termination by Agreement
It is always open to parties to agree to variations to their contractual arrangements. That includes terminating it by agreement. Both parties are able to consent to termination of a contract. When they do, the mutual obligations to perform contractual obligations come to an end.

If you break a contract, the other party to the agreement can sue and seek damages in court. Material breaches can also be minor breaches, which are less impactful and easier to negotiate or mitigate outside of court. Fundamental breaches are breaches that allow the afflicted party to halt contract performance and sue for damages.