Contract Employment Arrangements

A contract employment arrangement is a type of work agreement, usually for a limited period of time or a short-term project. Contract employment is usually performed according to the specific terms of a written contract. This is because the employee is typically not a regular worker, but an independent contractor or other kind of specialist.

As such, the contract used may not be the standard employment contract that is used for a company’s regular hires, but rather a specific one drafted for a temporary or time-limited job. The temporary worker is usually called an independent contractor, temporary worker, contract laborer, or contract employee.

Some examples of contract employment arrangements include people hired for the following purposes:

• Various construction projects;
• Short-term projects specific to a business’s sales goals;
• Product-specific marketing campaigns;
• People to work on an investigative committee or other committees that serve limited purposes; and
• Employees involved in time-limited joint-venture projects between companies.

Increasingly, as business becomes more global in orientation, an employer may offer a person a posting in a foreign country for a time-limited period. This is a situation in which the employee would do well to consult an experienced employment lawyer. If a person has not worked abroad before, they may well not be aware of the many aspects of the foreign contract employment arrangement involved, e.g. whether the company will pay for transport of the employee’s family to the foreign location and relocation home again.

This is only one of many issues that a person may want their contract to address in a foreign posting situation. A lawyer will be knowledgeable of all the issues that need to be addressed.

What is Usually Contained in a Contract Employment Agreement?

Contract employment arrangements should be guided by a written agreement between the employer and the worker(s) or the agency and the worker(s). The terms of the agreement should include the following:

• Terms for payment (i.e., how much is to be paid, the schedule by which payments are to be made, etc.);
• How long the employment will last, and under which conditions the employment may be terminated;
• The specifications for the work product the contractor or worker will provide; and
• Whether the worker will receive benefits of any kind, such as insurance coverage, pay bonuses for on-time performance and the like.

A company itself may make contract employment arrangements through its hiring or human resources department. However, in many cases, an employment agency may fill the company’s hiring needs by providing temporary workers who fit the descriptions of the contract employment terms. If the agency is the employer, then the agency deals with the contract and negotiates the terms of the assignment.

What if There is a Dispute Over the Contract Terms?

In a temporary employment arrangement, the contract terms should be very specific and clear. They should not contain any statements that are unclear or ambiguous or terms that are not well-defined. In order to achieve a clear and understandable agreement, it may be necessary for each of the parties individually to hire lawyers who can help negotiate the contract.

In the event that there is a dispute over the contract terms, the parties always have the choice to first negotiate a resolution of the dispute. Should that prove impossible, one or the other party may decide to file a lawsuit in a civil court for breach of contract.

The court would then decide whether there was a valid contract, what the terms of the contract required of each party and whether each of them performed as promised in the agreement. In a contract employment arrangement, disputes commonly arise with regards to either payment for the labor, or with the quality and completeness of the work performed.

What are Some Remedies Involved in a Contract Employment Lawsuit?

The law provides a number of different remedies for breach of an employment contract. The following are some common options:

• Compensatory damages: Compensatory damages are usually paid in the form of money to reimburse the non-breaching party for financial losses it suffers because of a contract breach. They might be considered general or expectation damages, which compensate for the loss directly caused by the breach. Or, they might also cover consequential damages, which compensate for losses that were only indirectly caused by the breach of the contract.
  • For example, a person may have purchased a machine for their factory which was paid for but never delivered. A court would award general damages in an amount equal to the value of the money the person paid for the machine they never received. The consequential losses could include an amount equal to the loss of business caused by the fact the purchaser did not have the machine needed to complete its orders;
• Specific performance: Specific performance is a court order to the effect that the breaching party must provide the performance that was promised in the contract. In a contract employment arrangement, a court might order the breaching employee to provide the work performance they promised to provide in the contract, if they have not done so. If the breaching party fails to perform as promised after a court has issued an order for specific performance, the party who fails to perform would be guilty of contempt of court;
• Rescission: Rescission is the court-ordered cancellation of a contract. It is available as a remedy in a variety of legally technical situations and is not common, but is an option in certain limited situations;
• Liquidated damages: Parties to a contract sometimes include a liquidated damages clause in the contract. It is a clause that states the amount of damages the parties can recover if there is a lawsuit for breach of contract. Courts do enforce liquidated damage clauses if the amount stated is reasonable in light of the nature of the contract and the harm that would be caused by a breach would be difficult to quantify.

If the laborer or worker has breached the contract, they may be required to reimburse the company employer if they have caused them any losses. A common example of this is where a construction company does not finish a building job in the agreed-upon time frame. Such delays may cost the business some profit, in which case the construction company may need to pay the amount of lost profit in damages.

Or, the breach may lead the construction company to have to pay liquidated damages to the owner for the failure to complete a phase of a construction project on time. The breaching worker may be liable for paying the liquidated damages for delay.

Do I Need a Lawyer for Help With Contract Employment Arrangements?

Contract employment is a very specific subset of employment law. If you need assistance negotiating or reviewing an employment contract, you may wish to contact an experienced contract lawyer in your area.

Your attorney can help you in negotiating the initial stages of the agreement process, and may well be able to suggest terms and provisions for the contract that you might not have thought of. They can write the contract also and may well get you a better deal than you could have obtained on your own.

If you are a party to a contract that has been breached, whether you or the other party has failed to perform, an experienced employment lawyer can also represent you in court if you need to file a civil lawsuit. You will always understand your position better if you have consulted an experienced lawyer.