IMPORTANT ASSIGNMENT 4

SCOOBYR

9781284538588_SLID_CH05.pptx

Home >Business & Finance homework help >Management homework help >IMPORTANT ASSIGNMENT 4

Contracts

Chapter 5

LEARNING OBJECTIVES

Explain what a contract is.

Describe the elements of a contract.

Discuss independent contractors, as they apply to contract law.

Describe how a hospital can be liable for the acts of a physician.

LEARNING OBJECTIVES -II

Explain the possible defenses and remedies for nonperformance of a contract.

Describe under what circumstances an employee handbook could be considered a contract and how to avoid that assumption.

What is a Contract?

A special agreement, written or oral, that involves legally binding obligations between two or more parties.

Purpose of a Contract

To specify, limit, & define agreements that are legally enforceable.

A contract forces the participants to be specific in their understandings & expectations of each other.

Contracts serve to minimize misunderstanding & offer a means for parties of a contract to resolve disputes that may arise.

Types of Contracts

Express

Oral

Written

Implied

Voidable

Types of Contracts - II

Executed

Enforceable

Unenforceable

Contracts for Reality, Goods & Services

Elements of a Contract – I

Offer/Communication

Consideration

Adequacy

Acceptance

Meeting of the Minds

Definite & Complete

Duration

Complete and Conforming

Breach of Contract

Occurs when there is a violation of one or more of the terms of the contract.

Elements necessary to establish a breach

a valid contract was executed.

plaintiff performed as specified in the contract.

defendant failed to perform as specified in the contract.

plaintiff suffered economic loss as a result of defendant's breach of contract.

Competent Parties

Corporations

Partnerships

Agents

Apparent or Ostensible Agent

Right to Assume Hospital is Medical Provider

Conditions

Act/s or event/s that must occur or be performed by one party before the 2nd party has any responsibility to perform under the contract.

Performance

Substantial performance by one party to a contract will obligate the other parties to perform.

Nonperformance Defenses

Fraud

Mistakes

Mistake of Fact

Mistake of Law

Duress

Impossibility

Statute of Limitations

Remedies

Specified Performance

Monetary Damages

General & Consequential Damages

Duty to Mitigate Damages

Arbitration

Employment Contracts

Express Agreement

Implied Contracts

Text Cases: Employment Contracts

Nurse Breaches Contract:

Repayment of Tuition Required

No Express Agreement: Right to Terminate

Restrictive Covenant Enforceable

Restrictive Covenant Not Enforceable

Employee Handbooks – I

Elements necessary to establish employee handbook as a contract:

policy statement that clearly sets forth a promise the employee can construe to be an offer

policy statement must be distributed to the employee, making him or her aware of the offer

after learning about the offer & policy statement, the employee must “begin” or “continue” to work

Employee Handbook Cases

Hospital Violates Provisions of Employee Handbook

Handbook Not a Contract Due to Disclaimer

Medical Staff Bylaws Considered a Contract

Medical Staff Bylaws a Contract

Applicants for appointment to a medical-dental staff submit a signed application attesting he has read & agree to accept & abide by the bylaws.

The physician promises to abide by the medical staff bylaws in exchange for privileges.

Exchange of promises, constitutes consideration to support any contract of this bilateral nature.

Right to Hearing

Independent Contractor

Individual who agrees to undertake work without being under the direct control or direction of another.

Generally, healthcare organization are not liable for negligent acts of independent contractors (e.g., physicians).

Exclusive Contracts

An organization often enters into an exclusive contract with physicians or medical groups for the purpose of providing a specific service to the organization.

Exclusive contracts generally occur within the organization's ancillary service departments (e.g., radiology, anesthesiology, and pathology).

Noncompetitive Contract Clauses

Often included in employment agreements.

Agreement not to practice within agreed upon geographic area.

Legal counsel should be sought prior to executing such agreements.

Restraint of Trade

Sherman Antitrust Act

contracts involving restraint of trade are illegal.

e.g., anti-competitive abuses when granting Hospital Staff privileges

Staff Closure Considerations

Consideration of organization & community needs

Effect on contracts organization may have with other healthcare delivery systems

Effect moratorium will have on physician groups that may desire to add a partner

Staff Closure Considerations - II

Economic effects (e.g., physicians, hospital)

Effect of limited moratorium by specialty

Characteristics of medical staff (is the staff aging & need for physicians competent in new technologies)

Staff Closure Considerations - III

Potential for restraint of trade legal action under antitrust laws

Effect on physicians without staff privileges whose patients are admitted to the hospital

Committee to develop a moratorium policy

Staff Closure Considerations - VI

Periodic review of need for moratorium

Effect medical staff resignations during the moratorium may have on the organization’s census

Consultant to study (e.g., demographic marketplace, physician referral patterns)

Transfer Agreements – I

Identification of parties to agreement

Purpose of agreement

Policies & procedures for transfer

Organizational responsibilities for transfer

Exchanging/Sharing information

Transfer Agreement – II

Retention of autonomy

Procedure for settling disputes

Procedure for modification or termination

Sharing of Services

Publicity

Exclusive v. Non-exclusive agreement

Insurance Contracts

Form of risk management used primarily to hedge against risk of potential loss.

Insurer obligation to indemnify insured for losses caused by speciﬁed events.

Insured pays fixed premium

Review Questions – I

What is a contract?

Describe differences between express & implied contract.

What are the elements of a contract?

Discuss remedies available for nonperformance of a contract.

Discuss importance of disclaimers in employee handbooks.

Review Questions – II

6. Discuss why courts often consider medical staff bylaws a contract.

7. Explain why exclusive contracts are so controversial.

8. What is an insurance contract?