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Employment Contracts and Compensation Agreements


4. BEST EFFORTS.  Although it is often just assumed that the employee will work hard for the employer, sometimes employers add a best-efforts provision to the employment contract.  It states that the employee promises to work to the best of his or her ability, and to be loyal to the employer. Sometimes it also states that the employee specifically agrees to make suggestions and recommendations to the employer that will be of benefit to the company.

5. EXCLUSIVE EMPLOYMENT.  In this provision, the employee promises that as long as he or she works for the company the employee will not work for anyone else in the same or similar type of business.  It may also extend to a promise not to be a shareholder or director in a similar business, or even to provide services voluntarily to a competitor business.

6. NO ADDITIONAL COMPENSATION.  The "no additional compensation" clause states that if the employee becomes an elected director or officer of the company or serves on a company managing committee, the employee will not be entitled to additional compensation for doing that work.

7. NO AUTHORITY TO CONTRACT.  Sometimes this part of the contract is called the "agency" provision.  It makes clear that the employer and employee have an employment relationship only, not an agency relationship; the employee has no right to enter into a contract or otherwise obligate the employer, unless the employer gives express written consent to do so.

8. TERMINATION.  A standard part of any employment contract is the "termination" clause.  It states that either party may terminate the employment contract for any reason by giving a certain amount of notice, such as two weeks' notice.  It may also give the employer the right to just terminate the contract without notice if the employee violates the contract in any way.  Another aspect of the termination clause is a statement that the employer has the right to terminate the contract if the employee becomes permanently disabled because of ill health or physical or mental disability such that the employee can no longer do the job.


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