Common law requirements for an employment contract

Written by eric novinson
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Common law requirements for an employment contract
Some employment contract terms are implied under common law. (contract 20309 image by pablo from

When an employee works for an employer, a contract forms. Many employers provide a specific written contract establishing employment conditions. If an employer does not create a written contract, an employment contract is still created under common law. According to Rutgers University, this type of contract is called an employment contract implied in fact. Common law can also imply the existence of additional terms which are not written in an employment contract.

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Contract Formation

Since there is no single, written record of the employment contract, the employer and employee agree to the terms of the work through an oral agreement. Without a written contract, the court decides what the contract terms are using other sources of information, such as common terms of work in an industry and applicable state and federal laws. According to Rutgers University, the combination of an oral agreement and the actions of the employer and employee combine to create a legally enforceable contract.

Employee Perspective

The employee's understanding of the employment contract does not create an obligation to an employer. According to the History Cooperative, a domestic servant believed she had a long term contract with her employer, because the employer stated that she hired servants for longer periods of time if they suited her. A court ruled against the domestic servant because the employer used conditional language such as "if they suit me," and common practice in the domestic servant field involved contracts lasting a single month.

Co-worker Testimony

Testimony from other employees at a workplace can establish terms of an employment contract. According to Rutgers University, a manager who worked for a supermarket did not have a written contract and was terminated after a clerk she supervised did not distribute a coupon. The manager was able to contest the termination, because she provided written notes to the court from other managers of the supermarket stating that company policy is to issue three warnings before terminating employment.

Employee Responsibilities

Common law also establishes responsibilities for the employee. These responsibilities are known as the employee's fiduciary duties. Fiduciary duties vary by profession. According to Louisiana State University, a scientist must not perform research for competitors while working at a company and must notify the company he works for about any potential conflicts of interest. Fiduciary duty also prevents the scientist from starting his own firm in the same industry as the employer while working for the employer.

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