An Employment Contract or Agreement is a memorialized writing, signed by employer and employee, laying out the terms and conditions of the employee’s employment. The key terms involved are generally the term (i.e. length) of employment, the scope of the employee’s job duties, the compensation to be received by the employee (including benefits, bonuses, or commission), grounds for termination (and if a severance package will be provided upon termination with or without cause), confidentiality, an exclusivity/non-compete clause, intellectual property rights, and a dispute settlement mechanism.

When signed, the Employment Contract is a legally binding contract giving rights and imposing obligations on both employee and employer in exchange for valuable consideration. An employment contract is subject to the same challenges to enforceability as all other contracts, namely defenses such as fraud, duress, misrepresentation, unconscionability, or ambiguity. Absent a contract defense however, employment agreements are legally valid and binding. In addition, some states read an implied covenant of good faith and fair dealing into employment contracts. As such, the parties may not resort to technical or contrived excuses to avoid complying with the terms of the contract.

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