Contracts
Contract• A special agreement, written or oral, that involves legally binding obligations between
two or more parties.Purpose of a Contract• To specify, limit, & define agreements that are legally enforceable.• A contract forces the participants to be specific in their understandings & expectations of
each other.• Contracts serve to minimize misunderstanding & offer a means for parties of a contract to
resolve disputes that may arise.Types of Contracts - I• Express
– Oral– Written
• Implied• Voidable
Elements of a Contract – I• Offer• Consideration
– AdequacyElements of a Contract – Acceptance• Meeting of the Minds • Definite & Complete • Duration • Complete and Conforming
Breach of Contract• Occurs when there is a violation of one or more of the terms of the contract.• Elements necessary to establish a breach
– a valid contract was executed.– plaintiff performed as specified in the contract. – defendant failed to perform as specified in the contract. – plaintiff suffered economic loss as a result of defendant's breach of contract.
Competent Parties• Corporations• Partnerships• Agents• Independent Contractors
Legality of Object• To be a valid contract, the contract must not violate any federal or state statute, law, rule
or regulation.Conditions• Act/s or event/s that must occur or be performed by one party before the 2nd party has any
responsibility to perform under the contract.Performance
• Substantial performance by one party to a contract will obligate the other parties to perform.
Nonperformance Defenses – I • Fraud• Mistakes
– Mistake of Fact– Mistake of Law
• Duress• Illegal Contract• Impossibility• Statute of Limitations
Remedies• Specified Performance• Monetary Damages• General & Consequential Damages• Duty to Mitigate Damages
Employment Contracts• Express Agreement• Implied Contracts
Text Cases: Employment Contracts• Nurse Breaches Contract:
– Repayment of Tuition Required• No Express Agreement: Right to Terminate• Restrictive Covenant Enforceable• Restrictive Covenant Not Enforceable
Employee Handbooks – I • Elements necessary to establish employee handbook as a contract:
– policy statement that clearly sets forth a promise the employee can construe to be an offer
– policy statement must be distributed to the employee, making him or her aware of the offer
– after learning about the offer & policy statement, the employee must “begin” or “continue” to work
Employee Handbooks – II • Hospital Violates Provisions of Employee Handbook • Handbook Not a Contract Due to Disclaimer• Termination of Contract Due to Insubordination
Medical Staff Bylaws a Contract• Applicants for appointment to a medical-dental staff submit a signed application attesting
he has read & agree to accept & abide by the bylaws.• The physician promises to abide by the medical staff bylaws in exchange for medical
staff privileges.• Exchange of promises, constitutes consideration to support any contract of this bilateral
nature.Exclusive Contracts
• An organization often enters into an exclusive contract with physicians or medical groups for the purpose of providing a specific service to the organization.
• Exclusive contracts generally occur within the organization's ancillary service departments (e.g., radiology, anesthesiology, and pathology).
Noncompetitive Contract Clauses• Often included in employment agreements.
– Agreement not to practice within agreed upon geographic area.– Legal counsel should be sought prior to executing such agreements.
Transfer Agreements – I• Identification of parties to agreement• Purpose of agreement• Policies & procedures for transfer• Organizational responsibilities for transfer• Exchanging/Sharing information
Transfer Agreement – II• Retention of autonomy• Procedure for settling disputes• Procedure for modification or termination• Sharing of Services• Publicity• Exclusive v. Non-exclusive agreement
Insurance Contracts• Form of risk management used primarily to hedge against risk of potential loss. • Insurer obligation to indemnify insured for losses caused by specified events.• Insured pays fixed premium
- Contracts