Background: Contracts are essential for business, and will be an integral part of PI operations, so the owners now want to center their attention on contract law. Each of the owners have had experience with contracts in their own businesses, and appreciate the probable risks and liabilities associated with contracts.

To reduce risks and liabilities associated with contracts, the owners want all contracts to be written, with specific, complete, and clear terms. For example, contracts with agents, such as employees and independent contractors, must define rights and responsibilities of the parties and the nature and scope of agents' authority. Also, since employees and/or independent contractors will be performing cleaning services on clients' properties, these contracts should consider bonding.

They know that there are various types of contract agreements that are relevant to PI. For example, the company will have individual contracts with employees, independent contractors, and other agents who will represent the company. Also, the company will engage in sales contracts with other businesses, and sales contracts between businesses and consumers and clients. Furthermore, PI will use electronic contracts, or e-contracts, in conducting online business transactions.

Although the PI owners have all had experience with contracts, they understand the importance of having a written standard form contract for the business. They also recognize that vague or incomplete contracts can create risks for the business.

You, Pat and Gale presented draft contracts for several PI employees, including contracts for painters, office managers, marketing specialists, sales representatives, and IT employees.

The PI owners reviewed the drafts and have some questions about the contracts.

Instructions: It is your responsibility to research and provide answers to the PI owners' questions.

The first questions relate to the PI painter-employee contract.

The painter contract specifies the following terms and conditions:

duties to be performed by painter-employee
salary for painter-employee
work hours
terms of payment for overtime or holiday work, if any
sick leave
vacation
training for painter-employee
length of contract
bonding for painter-employee
periodic performance evaluation and how it will be conducted
termination of contract, i.e., notice of termination, etc.

Research, evaluate, and respond to the owners' questions about the contract terms below. Your findings should be prepared in paragraph format.

Number all parts of your responses to PI. For example:

A.

1.

2. etc.

A. duties to be performed by painter-employees

1. What potential risks and liabilities could arise if the specific duties of painters were not included in their contract with PI? Explain.

B. training for painter-employees

1. What possible risks and liabilities could arise related to this contract term that designates specific and required training for PI painters.

2. Would the risks and liabilities be greater or less if PI did not train its painters and hired only experienced painters? Why?

C. termination of contract

1. What possible risks and liabilities could arise related to this contract term that specifics the policies and procedures that PI will use to terminate an employee contract? Explain.

2. How could this contract term potentially protect PI from liability for terminating a contract? Explain.