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TOPIC NAME Consideration of a contract for an offer letter to an employee from an organisation Submission Date: 21/11/2013
EXECUTIVE SUMMARY
This report will help us understand the importance of a contract and its main elements. In this regard we have taken, as a contract, a job offer letter from an organisation (Redington Gulf) to a potential employee. We will see what the phases of a contract are and what are the elements that keep the parties to a contract bound to each other. This report will explain us the role of a contract to keep a professional relationship stable. We have discussed the phases and terms of a contract, the subject matter on which the contract is based. We will understand how differences between the parties can be resolved by using proper corrective measure and how a contract can be kept stable using effective contact management practices.
TABLE OF CONTENTS Description EXECUTIVE SUMMARY INTRODUCTION OFFER AND ACCEPTANCE PHASE SUBJECT MATTER OF THE CONTRACT CONDITIONS AND WARRANTIES DISPUTES IN CONTRACT CONTRACT MANAGEMENT PRACTICES CONCLUSION REFERENCES APPENDIX Page No. 2 3 5-6 6-8 8-9 9 10 11 12 13
INTRODUCTION
Redington Gulf is a reputed regional distributor in the Middle East and Africa, holding distributing agencies of various brands such as Hewlett Packard, Asus, Canon, Acer, etc... It started its operations as a trader for HP products in Jebel Ali, Dubai in 1997 emphasizing on excellent customer service and pricing. Later it expanded into various GCC and African markets and acquired the tag of Regional Distributor post 2002. The company has a strong brand portfolio and sound distribution channels and logistics to cater to its ever growing market base. It believes that efficient customer service is the key to maintaining a strong customer base. Redington Gulf is one of the most desired career spots for many aspiring youngsters and experienced professionals. The organisation chooses a potential employee after looking at his past experience and analyzing his various intellectual abilities, to ensure if the candidate can help the company achieve its objectives. In this report we are going to discuss the different phases of a contract, considering a job offer letter to an employee from Redington. In this case the potential employee is the offeree and the company is the offeror. This report will show us what the importance of a contract is and what role a contract plays to keep a professional relationship stable. We will learn about the types of terms used in a contract. Further, the report will enlighten us on the importance of managing the contract efficiently.
employment could be conditional upon the signing of a written agreement. (Corry, 2007) If the potential employee agrees to the terms, he may sign the offer letter and communicate it to the employer. In case the employee doesnt consent with certain term(s), it may negotiate with the employer or simply reject the offer.
PROPRIETORY RIGHTS Property is something that holds value and is owned by an individual or a group of individuals and the owner[s] holds the proprietory rights towards it. It maybe land, building, information, knowledge, etc. Property can be divided into two: (1) Real Property and (2) Personal Property Real property is any piece of legal land. It may have been improvised with fixtures, buildings, etc. Which further adds value to the property.Since a piece of land can be put to many uses; the value of such real property generally appreciates over time. The owner of such property can put it to any use as he/she requires. Personal property is any such property which is not real property. There are two types of personal properties: 1. Tangible Property, which can be touched, felt and is movable. Eg. Cars, Machinery, Etc... In the case of many tangible properties, their value depreciates over time due to wear and tear. 2. Intangible Property, which cannot be seen, touched or felt. But it holds a value. Eg: Negotiable Instruments, patents and other intangible assets. Another category of personal property is Intellectual Property [IP]. Intellectual property is basically a legal right regarding an intangible property. It is not capable of being possessed or occupied like tangible properties. In context of our report, the organisation also holds an intellectual property in the form of internal information of the organisation which is supposed to be kept confidential and private. The contract clearly states that the employee is expected to
keep the private internal information of the firm to himself and under any circumstances should not leak out any such information to any outsider to the organisation. Any leaked confidential information may prove to be fatal for the business operations of the firm or defame it. Appendix 2 states it.
which penetrate to the root of the contract, whereas warranties are subsidiary to them. The condition of the contract is given in Appendix 3. The warranty of the contract is given in Appendix 4.
Since in the given contract no such clause is stated that is intended to solve any differences between the parties, the parties will seek legal action in case of any dispute.
updation/amendment of the contract. This is known as Contract Management. Effective and efficient contract management practices are very critical throughout the life of the contract, because unnecessary disputes and differences only add to the loss of time and money. Many provider organisations are losing millions of revenue dollars each year because their systems and administrative processes do not efficiently and effectively monitor and enforce contract terms. (Lohman, 1999) Contract management ensures that both the parties fulfill all their obligations that they agree to while initiating the contract and the employee receives all the benefits assured to him by the employer , in case of an employment contract. In the case of the given contract, if there is no good contract management in place, any dispute will lower the productivity of the employee and lead to loss for the organisation and inturn not meeting their overall goals on time.
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CONCLUSION
In this report, we took into consideration a job offer letter to understand the importance of a contract and its main elements. We discussed the different phases of a contract. There should be a party to offer something and a second party to accept the offer. Here, potential employee was the offeree and the company was the offeror. The report showed us the importance of a contract and what role a contract plays to keep a professional relationship stable. There should be a subject matter for which a contract is being made. The terms of a contract play an important role in guiding it in the right direction. We learnt that differences between the parties are inevitable, but there should be a proper arrangement to solve such differences. Also, the contract should be properly managed to achieve its main objectives. This particular organisation should introduce a clause to solve a dispute between them and an employee. Also effective and efficient contract management practices should be devised to guide the contract accurately.
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REFERENCES:
Corry, D. (2007). Contracts prevent employers from getting burned in hot markets. Canadian HR Reporter, 20(11), 9. Retrieved from http://search.proquest.com/docview/220807796?accountid=9653
Jacmac, (2012), Condition Vs Warranty in a Contract, [Online], available at http://www.jacmac.com.au/uploaded/News/publications/201204_Condition_vs_Warra nty_in_a_Contract.pdf [12-11-2013]
Lohman, P. 1999, "Optimizing revenues through effective contract management", Healthcare Financial Management, vol. 53, no. 9, pp. 35-7.
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APPENDIX
APPENDIX 1 [CLAUSE NO. 1] Your present assignment will be that of Credit Coordinator. The company may however reassign and/or transfer you to any other similar position within the company or any of its subsidiary or associate companies. APPENDIX 2 [CLAUSE NO. 8. d] During the terms of your employment with the Company or at any time thereafter, you shall not use or disclose to any other company, firm or organisation or person any information concerning the secrets, business or affairs of the Company nor do commence any act prejudicial to the interest of the Company. APENDIX 3 [CLAUSE NO. 2] You shall be employed for an initial period of three months from the date of joining, which shall be termed as probation period. After successful completion of this period, your services shall be confirmed for a period of Two (2) years from the date of joining. This period can be extended with mutual agreement. APPENDIX 4 [CLAUSE NO. 7] In case you resign from the company before completing two years from the date of joining, the company is liable to deduct two months fixed component from the dues payable to you against the expenses incurred on visa, work permit, recruitment, training, etc.
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