Principle of Lawfulness in a Contract of Employment

Employment contracts must be lawful to be enforceable.

To form a contract, there must be an offer, acceptance of the offer and consideration, and the purpose of the contract must be lawful. This is always the case, even in terms of an employment contract. Aside from the purpose being lawful, enforcement of the contract must be lawful as well.

Lawful Purpose

An employment contract must be for a lawful employment purpose, or the contract is not valid. One can enter into a contract to be a salesperson, a teacher or a mechanic, and these contracts are perfectly valid and lawful. One cannot enter into a contract to sell illegal drugs or to prostitute; these contracts are void at the moment of creation.

Unlawful Terms

The terms of a contract must be lawful, or they will be stricken from consideration when the contract is interpreted. For instance, a noncompete clause must not be for too long a period of time or for too great of a geographic area, or it will not be considered valid.

Public Policy

An unlawful employment contract cannot be enforced, due to public policy. If an employment contract violates the law, a court cannot enforce it without breaking the law--a result that a judge cannot condone.

References

• Find Law: Employment Contracts and Compensation Agreements
• LexisNexis: Contracts Capsule Summary