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Assignment: Jones and Bartlett Publishers
Assignment: Jones and Bartlett Publishers
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Assignment: Jones and Bartlett Publishers
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LEARNING OBJECTIVES
- Explain what a contract is and the elements thereof.
- Discuss independent contractors, as they apply to contract law.
- Describe how a hospital can be liable for the acts of a physician based on the concept of contract law.
- Explain the possible defenses and remedies for nonperformance of a contract.
- Describe under what circumstances an employee handbook could be considered a contract and how to avoid that assumption.
Contract
- A special agreement, written or oral, that involves legally binding obligations between two or more parties.
Purpose of a Contract
- To specify, limit, & define agreements that are legally enforceable.
- A contract forces the participants to be specific in their understandings & expectations of each other.
- Contracts serve to minimize misunderstanding & offer a means for parties of a contract to resolve disputes that may arise.
Types of Contracts – I
- Express
- Oral
- Written
- Implied
- Voidable
Elements of a Contract – I
- Offer
- Consideration
- Adequacy
Elements of a Contract – Acceptance
- Meeting of the Minds
- Definite & Complete
- Duration
- Complete and Conforming
Breach of Contract
- Occurs when there is a violation of one or more of the terms of the contract.
- Elements necessary to establish a breach
- a valid contract was executed.
- plaintiff performed as specified in the contract.
- defendant failed to perform as specified in the contract.
- plaintiff suffered economic loss as a result of defendant’s breach of contract.
Competent Parties
- Corporations
- Partnerships
- Agents
- Independent Contractors
Legality of Object
- To be a valid contract, the contract must not violate any federal or state statute, law, rule or regulation.
Conditions
- Act/s or event/s that must occur or be performed by one party before the 2nd party has any responsibility to perform under the contract.
Performance
- Substantial performance by one party to a contract will obligate the other parties to perform.
Nonperformance Defenses – I
- Fraud
- Mistakes
- Mistake of Fact
- Mistake of Law
- Duress
- Illegal Contract
- Impossibility
- Statute of Limitations
Remedies
- Specified Performance
- Monetary Damages
- General & Consequential Damages
- Duty to Mitigate Damages
Employment Contracts
- Express Agreement
- Implied Contracts
Text Cases: Employment Contracts
- Nurse Breaches Contract:
- Repayment of Tuition Required
- No Express Agreement: Right to Terminate
- Restrictive Covenant Enforceable
- Restrictive Covenant Not Enforceable
Employee Handbooks – I
- Elements necessary to establish employee handbook as a contract:
- policy statement that clearly sets forth a promise the employee can construe to be an offer
- policy statement must be distributed to the employee, making him or her aware of the offer
- after learning about the offer & policy statement, the employee must “begin” or “continue” to work
Employee Handbooks – II
- Hospital Violates Provisions of Employee Handbook
- Handbook Not a Contract Due to Disclaimer
- Termination of Contract Due to Insubordination
Medical Staff Bylaws a Contract
- Applicants for appointment to a medical-dental staff submit a signed application attesting he has read & agree to accept & abide by the bylaws.
- The physician promises to abide by the medical staff bylaws in exchange for medical staff privileges.
- Exchange of promises, constitutes consideration to support any contract of this bilateral nature.
Exclusive Contracts
- An organization often enters into an exclusive contract with physicians or medical groups for the purpose of providing a specific service to the organization.
- Exclusive contracts generally occur within the organization’s ancillary service departments (e.g., radiology, anesthesiology, and pathology).
Noncompetitive Contract Clauses
- Often included in employment agreements.
- Agreement not to practice within agreed upon geographic area.
- Legal counsel should be sought prior to executing such agreements.
Transfer Agreements – I
- Identification of parties to agreement
- Purpose of agreement
- Policies & procedures for transfer
- Organizational responsibilities for transfer
- Exchanging/Sharing information
Transfer Agreement – II
- Retention of autonomy
- Procedure for settling disputes
- Procedure for modification or termination
- Sharing of Services
- Publicity
- Exclusive v. Non-exclusive agreement
Insurance Contracts
- Form of risk management used primarily to hedge against risk of potential loss.
- Insurer obligation to indemnify insured for losses caused by specified events.
- Insured pays fixed premium
Review Questions – I
What is a contract?
Describe differences between express & implied contract.
What are the elements of a contract?
Discuss remedies available for nonperformance of a contract.
Discuss importance of disclaimers in employee handbooks.
Review Questions – II
6. Discuss why courts often consider medical staff bylaws a contract.
7. Explain why exclusive contracts are so controversial.
8. What is an insurance contract?
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