Georgia is known as an at-will employment state, which means most workers serve at the pleasure of their employers. Certain employees have contracts that guarantee compensation levels and other terms consistent with set performance expectations. While contracts can effectively spell out the rights and obligations that employees and employers have towards each other, mistakes in the drafting process have the potential to derail agreements and may make them entirely void.
In Georgia, a contract is void if there is something that renders it unenforceable from the start. Neither the employee nor the company are bound by its terms. Examples of problems that can make a contract void include:
- Contractual terms obligate a party to act illegally or do something that violates public policy
- One of the parties lacked mental capacity to understand what they were signing
- A party was under the age of 18
- The contract includes terms that are impossible to fulfill
A voidable contract, on the other hand, is one that is valid at the beginning but becomes void later on. Voidable contracts don’t automatically become void. A party can choose to end a voidable contract in scenarios such as:
- The other party breaches the contract
- The contract was signed under false pretenses
- One party tries to force the other to sign an agreement allowing the contract to be violated
- Information was withheld or misrepresented during the contract formation process
- There is a mutual mistake by both parties about the same material fact within the contract
Employment contracts can be void for more reasons than those listed above. Here are some drafting problems that can make an employment agreement void in Georgia:
- Too broad — Employment contracts should be drafted to fit the specific employee. A contract that is appropriate for a high-level manager might have provisions that don’t fit a lower level employee.
- Too restrictive — Employers should be careful not to restrict employee rights too extensively, which is often a problem with non-competes, nondisclosure agreements (NDAs) and trade secret-related contract provisions.
- Lack of consideration — Employees must receive consideration or a benefit from the contract. This could be a salary, bonus or other form of compensation. Contracts lacking consideration are void.
- Lack of severability — Severability clauses allow the rest of a contract to survive if part of it is unenforceable. Contracts lacking this clause risk being ruled entirely void.
The Reddy Law Firm in Suwanee helps Georgia employees and businesses draft and review employment agreements, NDAs and other contracts. To get advice or to talk about a potential contract dispute, please call 678-629-3246 or contact us online to schedule a free consultation with Georgia attorney K.P. Reddy today.