Table of Contents
- What is an employment agreement?
- What can be done about a breach of the employment agreement?
- How are damages calculated when an employment contract is breached?
- If I breached my contract, or am planning to, what are my defenses?
What is an employment agreement?
An employment agreement (or employment contract) is a written or oral agreement that sets the terms and conditions of employment. It typically covers pay, hours, duties, benefits, confidentiality, notice requirements, and termination provisions. Once accepted by both parties, it can be legally enforceable.
A breach occurs when an employer or employee fails to follow a material term of the agreement. Examples may include an employer denying promised benefits or an employee disclosing confidential information in violation of the agreement.
What can be done about a breach of the employment agreement?
Start by reviewing the agreement to confirm what the contract requires and whether the issue is actually a breach. Next, communicate with the other party in writing to document the dispute and allow an opportunity to fix the problem.
If the employee or employer breaks the terms of the contract in a way not specified in the agreement, then the other party may be entitled to damages and may enforce the agreement through means of court.
Some agreements require specific procedures, such as written notice, cure periods, or mandatory mediation or arbitration before court. If informal resolution fails or the contract requires formal action, an attorney can help identify the breached terms, preserve evidence, and evaluate whether enforcement or damages may be available.
How are damages calculated when an employment contract is breached?
In many employment contract disputes, the most common damages are financial and intended to compensate the non-breaching party for losses caused by the breach. For employees, this may include unpaid wages or compensation that was promised in the agreement. For employers, damages may involve costs tied to replacing an employee or losses tied to a contract violation, depending on the contract terms and proof.
In general, damages typically require proof of actual financial loss. Non-economic damages, such as emotional distress, are often not available for a basic breach of contract claim.
If I breached my contract, or am planning to, what are my defenses?
If you are sued for breach of contract in Pennsylvania or New Jersey, you generally must respond to the complaint by admitting or denying allegations and raising any applicable defenses. Potential defenses depend on the facts, the contract language, and procedural rules.
Below are examples of defenses that may apply in certain cases:
Lack of Capacity
A lack of capacity defense argues that a party did not have the legal ability to enter into a binding contract at the time it was formed. Depending on the circumstances, this can make a contract void or voidable.
Fraud
Fraud may be a defense where one party induced the other to enter the contract through intentional deception or misrepresentation. Proving fraud typically requires showing more than a misunderstanding or mistake.
Statute of Limitations
A statute of limitations defense argues that the claim was filed too late. In Pennsylvania, breach of contract claims are generally subject to a four-year limitations period for written and oral contracts, although the date the clock starts can depend on when the alleged breach occurred.
Statute of Frauds
Some contracts must be in writing to be enforceable. Whether the statute of frauds applies depends on the type of contract and what is being promised. If a writing is required and does not exist, enforceability may be challenged.
Disclaimer: This article is for general informational purposes only and does not constitute legal advice. Contract rights and defenses are fact-specific and depend on the agreement and applicable law.
We can be reached at (215) 960-9247 or visit our website https://philadelphiaattorneylawyer.com/practice-areas/breach-of-contract/ for more information.
