When is a Contract of Employment Invalid?

The validity of an employment contract depends on a variety of factors.

Just because the parties have agreed upon the terms to an employment contract does not automatically make the contract valid and enforceable. The validity of an employment contract generally depends upon a variety of factors.

State Law

State law can impact the validity of an employment contract, invalidating an agreement that would be enforceable in a neighboring state. Statutes and case law may limit the duration and terms of the parties' agreement. Illegal contracts are not enforceable.

Statute of Frauds

The statute of frauds refers to the common-law concept of which contracts must be in writing to be enforceable. Most states have codified a version of the statute of frauds into their own statutes and rules. If an employment agreement must be in writing pursuant to a given state's statute of frauds, an arrangement sealed with a handshake will not survive challenge.

Terms of the Contract

The terms of the contract may contain provisions stating when and how it terminates. Some employment contracts may terminate automatically upon one party taking or failing to take a certain action--such as relocating or completing continuing education requirements.

References

• The Second Restatement of Contracts; Lexinter.net; Retrieved September 2, 2010.
• "Employment Contract Provisions"; Employment Law Information Network; Retrieved September 2, 2010.
• "Written Employment Contracts: Pros and Cons"; Nolo.com; Retrieved September 2, 2010.