Case Study (a breach of contract ) Author: admin

Friday, 26 Sep 2014

It is known that any contract involves bargaining when two parties included in the contract agree to the specific terms which they should abide. However, when one of the parties to acontract fails to perform its terms in a proper way, it is a breach of contract (Seweryński 79). According to the employment law, “a breach of employment contract occurs when the terms and conditions of the employment law, which includesworking regulations that was agreed upon by an employer and employee is infringed or violated” (Facts on Breach of Employment Contract). It is known that a breach of contract can take several forms, such as nonperformance, anticipatory repudiation, creating impossibility and some other forms. In our case, Oscar who is a car sales person at XXX Motors is offered to work for another company and earn more. In case, Oscar accepts the proposal of Cameron Fast Cars Ltd., he will have to terminate his contract with XXX Motors. As Oscar’s contract contains the following clauses: “you will not for sixmonths after termination solicit any clients of XXX Motors” and “you will not at any time after termination use or disclose any confidential information belonging to XXX Motors”, it is clear that he will have no opportunity to solicit the clients of XXX Motors for a certain period of time. The above mentioned clauses are valid because these clauses are specially designed to protect the company’s brand name and its clients. It means that these clauses safeguard the company’s position in the competitive market.

In case Oscar breaches one of the clauses of his contract, he will be sued. It is clear that the company XXX Motors is interested in its successful business operations in the marketand in its reliable employees who should be loyal to the company. Although the company paid Oscar less than he was offered by Cameron Fast Cars, Oscar had a commission of 60% ofhis pay. In case Oscar terminates his contract, and gets a position in the Cameron Fast Cars Ltd., he will have to abide the terms of the contract of XXX Motors. He will have no rightto solicit any clients of XXX Motors and he will have no rightto disclose any confidential information about the company.

If having heard of Cameron Fast Cars approach, XXX Motors dismiss Oscar with immediate effect, it would make no difference because the terms of the contact will be violated

and the party should meet the requirements of the contract. Inthis case, we have breach of a contract in the form of nonperformance. It is known that nonperformance occurs when one of the parties to a contract breaches the contract. In case an employee neglects to perform his or her duties as agreed in the contract, a party has its right to breach the contract. It is said that a party breaches a contract if the performance of this party wasn’t in compliance with its contractual promise. It means that any performance that is notincluded in the contract is considered to be a breach of the contract (Facts on Breach of Employment Contract)

In our case, Oscar violated the terms of the contract because he was involved in relations with the company Cameron Fast Cars. However, he will have to meet the requirement of the contract, even if he is dismissed. He will not for six months after termination solicit any clients of XXX Motors, and he will not at any time after termination use or disclose any confidential information belonging to XXX Motors. It is known that Oscar has detailed knowledge of the costs of the extensive list of vehicles to company supplies, that is he is fully aware of the cost of vehicles to XXX Motors as well as the sales price to customers. Besides, he has information which includes an extensive client base and has actively courted customers by taking them for meals, to the theatre andto major sporting events. It means that he is acquainted with all the clients of the company. It is clear that this information is confidential and should not be disclosed, even after Oscar’s termination. As both companies operate in the one and the same market, and Oscar is going to work for another company, it is very important for him to avoid disclosure of the secret financial information concerning the company.

To sum up, any employment contract protects the rights of employees as well as the interests of employers. In the case discussed in this paper, the employee has to meet the requirements of the contract, even after his termination. In addition, the clauses of the contract represented in this casestudy are valid as they protect the interests of the company in the competitive market and help the company to hold its position in the market.

Works Cited

Facts on Breach of Employment Contract. Expert Los Angeles Attorney. 2012. Available March 23, 2012 from: <http://www.expertlosangelesattorney.com/FactsonBreachofEmploymentContract.html>

Seweryński, M. Collective Agreements and Individual Contracts of Employment. Kluwer Law International. 2003. Print.