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Work Contracts and Agreements 101

Before you start working for someone, or have someone work for you, both of you will need to come to a mutually acceptable agreement. While this agreement can be as simple as “I do X, you pay me Y,” taking into account each party’s rights and obligations often requires a written work contract.

What is a contract?

A contract is essentially a legally enforceable agreement between two or more parties. In the same vein, a work contract is typically a written agreement between a hirer and a worker that sets out the terms and conditions of the work.

Work contracts are the norm in any offer of work created by hirers, and they’re signed by all involved parties to confirm their agreement to its terms.

Terms and conditions

A contract’s terms and conditions define the rights and responsibilities of all parties to the contract, forming the basis of the work relationship.

It is imperative that you read and understand the terms and conditions of a contract before accepting. Seek independent legal advice if you find any term to be confusing, or if you have any questions on their meaning.

Many hirers also provide workers the opportunity to negotiate their contract’s terms and conditions before they agree. However, it is also common to be offered the same or a similar contract as everyone else doing the same work.

Standard form contracts

Standard form contracts are used by businesses to be more efficient in offering work contracts to their workforce. These contracts offer the same terms and conditions to workers, saving time and effort. However, their preparation should still take into account the worker’s rights.

Unfair contract terms

Because standard form contracts usually provide a worker little to no opportunity to negotiate terms and conditions, some unfair contract terms may arise. Fortunately, there are laws to protect workers from unfair contract terms.

There are several factors that can help determine whether a term is potentially unfair. Use the following questions to assist you in recognising a potentially unfair contract term:

  • Is the term reasonably transparent?
  • Is the term a reasonably necessary protection for the legitimate interests of the hirer?
  • Does the term create a significant imbalance between your rights and responsibilities and those of the hirer’s?
  • Would enforcing the term result in a financial or non-financial detriment to you?

Note that a term’s fairness should only be considered within the context of the contract as a whole. Only a court can make the final decision on whether a contract term is unfair.

Before making a complaint or taking any legal action, however, it is recommended to discuss any concerns with the business in an effort to resolve any issues.

Review your contract

If you wish to seek advice on your current or potential work contract, feel free to ask for our expert opinion by sending us a message on our Contact page.

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