Bill 168 and the Employment Standards Act · Intention to create legal relations In Ontario, the...
Transcript of Bill 168 and the Employment Standards Act · Intention to create legal relations In Ontario, the...
PREPARING CONTRACTS Ontario Chiropractic Association
May 4, 2016
Denise Robertson,
Mills & Mills LLP
Joined Mills & Mills LLP as an Associate in 2005.
Denise advises regulated health professionals including
private practices, multi-disciplinary clinics and long-
term care facilities.
Focus on starting a practice and running a practice, and
protecting the business and legal needs of her clients.
AGENDA
1. Types of Contracts
2. Requirements for a legal, binding & enforceable
contract
3. Considerations for Preparing Contracts
4. Terms for Agreements
5. Q&A
Overview of Types of Contracts
What Types of Contracts Apply to Your
Practice?
Lease Agreements
Agreements with Shareholders/Partners
Associate Agreements
Employee Agreements
Agreements with Independent Contractors
Goals for Contracts
Achieve clarity and a mutual understanding
Maintain professionalism
Reduce risk
Protect your practice
What is required for a
contract to be legal, binding
and enforceable?
4 things must exist:
1. the intention of the parties to create legal relations;
2. an offer from one of the parties (the “Offeror”) to the other
setting out the terms and conditions of the proposed
agreement;
3. an acceptance of the offer by the recipient of the offer (the
“Offeree”), which must be communicated to the Offeror;
and
4. a consideration must pass between the Offeror and the
Offeree.
Intention to create legal relations
In Ontario, the intention of the parties to create legal
relations is presumed. This is especially so in commercial
transactions between strangers.
Examples of legal relations:
going into business with another regulated health
professional
Intention to create legal relations
Examples con’t….
entering into a lease
hiring a receptionist or a bookkeeper
agreeing to provide services to an insurance
company for a fee
Offer and Acceptance
One party communicates an interest in
striking an agreement with another party
The other party accepts or makes a
counteroffer
Offer and Acceptance
If a counteroffer is made, the initial party
accepts the counteroffer, presents a
counteroffer of his or her own or decides not to
enter into the agreement at all.
Offer and acceptance can take many forms – it
may or may not be in writing; however…
Offer and Acceptance
Best practice is to reduce an offer to writing,
setting out key business terms and
conditions, and to have the offeree sign that
they accept the offer.
Offer and Acceptance
Remember, your motto should be…
“If it is not in writing, it doesn’t exist”:
ALL AGREEMENTS SHOULD BE DOCUMENTED IN WRITING!
Consideration
There must be an exchange of something of
value between an offeror and an offeree.
Typically, this is a promise to perform a service
in exchange for a promise to pay an agreed fee.
For example,
• In a contract between you and your
receptionist, your receptionist is providing
services for a fee (in the form of a salary).
Consideration
When renting space, your landlord agrees to
allow you to use space in return for lease
payments. You are permitted to use the space and
your landlord receives monetary compensation in
return.
Example
John is a chiropractor with a practice in Toronto.
His practice has been growing steadily and he
decides that it is the right time to hire another
chiropractor to work for him.
He remembers that he met Jane at a recent
networking event.
Example continued…
Jane is a chiropractor who recently moved to
Toronto and indicated she is looking to join an
established practice.
John approaches Jane and offers to hire her. John
and Jane meet to discuss the business relationship.
John puts their conversation in writing. Jane
reviews it and agrees that the contract accurately
describes their discussions.
Example
Intention to enter a legal relationship: John and Jane intend to enter an employment relationship. Offer: John offers to hire Jane as an employee. After discussion, the offer is documented in a written contract. Acceptance: Jane signs the written contract to document her acceptance of John’s offer. Consideration: Jane will work for John’s practice, providing services in accordance with the agreement between her and John. John will pay Jane a salary.
Get it in writing!
Overall, if there is an intention to create legal relations, an offer, acceptance and consideration, you have a contract.
Get it in Writing!
While the relationship is still amicable, be clear
on what is being agreed to.
Do not assume that the other party knows what
you intend.
Get it in Writing!
Two people often remember the same event in
two different ways. Perhaps not surprisingly,
this is even more often the case where the
relationship sours (people tend to “remember”
the original agreement in the way that is most
favourable to them).
Consideration for Preparing
Contracts
Drafting/Reviewing a Contract
When entering into an agreement, ask yourself the
following questions:
Who are the parties to the agreement? (i.e. Who
are the people entering into the contract?)
What is your understanding of what the
agreement between you and the other party is?
Drafting/Reviewing a Contract
Does the contract accurately describe your
understanding of the agreement?
What is the term / length of the agreement?
Have you / the other party received legal advice?
Ask yourself what you are agreeing
to. If the contract doesn’t clearly
answer this question then more work
is required.
Something to consider
If a disagreement arises that ends up in court -
the court may ask:
• What was the intention of the parties?
• What would an objective, reasonable person
understand the contract to mean?
• Are any of the terms ambiguous, vague or
missing?
Something to consider • Who drafted the contract?
• Is there an equitable basis to set aside the
contract?
What are specific terms for
lease agreements?
Lease Agreement
What space will you be leasing?
Leasehold improvements – who pays? Who
owns?
What is included in the lease?
What price will you be paying?
Will you need to make additional payments to
cover the maintenance of common areas of the
building?
Lease Agreement
What can the landlord do if you don’t pay rent?
When will you be making payments?
What is the length of the lease?
How will the lease be renewed?
What services are being included?
What happens if there is damage to the building?
What are your responsibilities when the lease
ends?
Agreements with Shareholders /
Partners
Is this a shareholders’ arrangement or
partnership arrangement?
If the business is incorporated and you and the
other party are shareholders, a shareholders’
agreement should be drafted.
Agreements with Shareholders /
Partners
If the business is not incorporated but there are
two or more people going into business together,
a partnership agreement should be drafted.
These agreements should cover how business
will be carried out and any important elements
of the business relationship.
Agreements with Shareholders /
Partners
What services will be provided by each of the
parties?
How will the parties be remunerated?
Will the parties receive an equal share of the
profits of the business?
How will clients be divided?
Agreements with Shareholders /
Partners
Will each party be expected to work a minimum
number of hours?
How will decisions be made? Will anyone be
able to veto another shareholder/partner?
What will be the grounds for termination of this
agreement?
Agreements with Shareholders /
Partners
If the business is wound up, how will its assets be
divided?
Have you included confidentiality provisions in the
agreement?
Have you considered how solicitation of
clients/employees and competition will be handled
if one of the shareholders / partners leaves the
business?
Shareholders Agreement
What will happen to a shareholder’s shares on
death or incapacity?
What will be the result of either of the
shareholders wanting to sell their shares / exit
the practice?
Shareholders Agreement
What will happen if one of the shareholders
separates from her or his spouse?
Will each shareholder be entitled to nominate a
director?
Will there be any restrictions on the powers of
the directors?
Associate Agreements
Who is making the agreement?
What are the services to be provided by each of
the parties (for example, the clinic, associate,
any other party)?
What will the associate’s responsibilities
include?
Associate Agreements
Will the associate be working at multiple
locations?
Who will be responsible for the assignment of
new incoming patients and how will the patients
be assigned to the Chiropractors working at the
clinic?
Who will be responsible for obtaining, paying for
and/or maintaining professional memberships?
Associate Agreements
How will remuneration and expenses be
handled?
How will the relationship be handled on
termination of the agreement?
Employment and Independent
Contractor Agreements
First, what’s the difference between employees
and independent contractors?
Employment Agreements
What is the date of hire?
Will there be a probationary period?
What will the employee’s roles and
responsibilities consist of?
What will be the employee’s salary? When and
how will the salary be paid?
• Will the employee be entitled to bonuses or
commission?
Employment Agreements
What will the employee’s vacation and sick day
entitlement be?
Have termination provisions been included in
the contract?
What restrictive covenants are appropriate (i.e.
non-solicitation, confidentiality, non-
competition)?
Independent Contractors Agreements
What services are included?
What is being paid for the services?
Who is responsible for expenses?
What is the term/renewal of the contract?
What are the responsibilities of the parties?
On what grounds can the contract be terminated
and by whom?
Independent Contractors Agreements
Can the contract be assigned by one or both of
the parties? If so, how?
Any insurance requirements?
Conclusion
Remember:
Clarity trumps complexity
Legalese is not necessary
Protect your practice
Sign the agreement
And……if it’s not in writing it doesn’t exist!
Questions?
The information contained in this presentation is of a general nature and cannot be relied upon as legal advice.
For legal assistance, contact Denise Robertson at 416-682-7139, or [email protected].