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Updated by robbinsfirm on Sep 26, 2017
Headline for Employment Contracts: 8 Things a Professional Ought to Know Prior to Signing
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Employment Contracts: 8 Things a Professional Ought to Know Prior to Signing

When you receive a job offer, congrats are in order. But prior to signing the contract, you should proceed with caution and thoroughly think about your employment contract. So many people are simply happy to get an offer. They might not feel at ease asking for more details, fearing that they're going to seem ungrateful or uninterested in the position. Yet it's imperative that employees, especially executives, completely understand the contents of their employment contract.

1

Precisely what will your compensation package include?

For those who have questions regarding compensation, the time for clarification is prior to signing anything. It is a situation where you be sure to should ask enough questions. What's the salary? Do bonuses, and how can they be earned? Do stock options or equity options exist? What about perks or benefits that count as earnings which will affect my tax liability?

2

Will there be a probationary period?

Many employers require an initial probationary period when workers start working. It might be 3 months, several weeks or perhaps a year. Since these probationary periods let your employer easily terminate you, it is vital for executives to know just how lengthy a time they're on probation. If you are leaving a good position for this new post, you'd like to learn precisely what situation you’re entering into.

3

What is the contract’s duration?

Many employment contracts are “at-will,” but you should read carefully the document, making sure you notice any surprises regarding the duration of the contract. If you feel that your current job is secure, however the contract states that your company may terminate you at the end of a three-year term, then you will need to be ready for that possibility when accepting the.

4

What is the exact scope of work?

This can be a point that some executives might not consider. What precisely is the job description for this position? It is an important point to clarify because executives must completely understand what's going to be anticipated. If your position should ideally be carried out by two or three people, then your offer of compensation might not be enough. To prevent confusion or issues in the future, clarify the scope of the role from the start.

5

What constitutes “cause” to terminate?

When the contract terms are uncertain regarding the scenarios that may end your employment, it's vital that you truly appreciate this prior to signing. Is it possible to be released at-will, without any reason needed? Or are you currently terminable under certain conditions that might be considered “for cause.” Make certain you realize the valid reasons for termination in your employment contract.

6

Are you going to own your intellectual property?

If your job involves patents, trademarked material or any other creative work, you should know what your interest in the intellectual property is going to be after and during the time you're engaged in the job. For instance, many engineers want to retain possession of their patents to gain professional credibility. However, many corporations keep the legal rights to the work produced during employment. If intellectual property is a big part of your position, you should make sure to clarify the policy.

7

What is the noncompete clause?

A noncompete clause can significantly limit what types of jobs you can accept in your region for quite a long time. Noncompete clauses or contracts should not be ignored. State law has its own laws and regulations associated with what kinds of clauses a company might or might not use in a noncompete. If you are requested to sign a noncompete, it is worthwhile to speak with an employment attorney. Your lawyer can have a look to make sure that the agreement won't unreasonably restrict your ability to work later on.

8

Are executives protected or indemnified from liability?

Should you operate in a business with litigation risks, it’s beneficial to completely understand your potential risk of personal liability because of your employment activities. Should you operate in a heavily controlled industry, or if your executive position includes great fiduciary duties, you must completely understand your potential liability for job related acts prior to signing anything.

An employment contract is a serious legal document. Don’t sign yourself on for a bad situation. Review your contract with a qualified contract litigation lawyer before signing on the dotted line.