Are compensation terms in employment contracts legally binding?

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Are compensation terms in employment contracts legally binding?

When my husband signed on with his current employer, he received a contract that stipulated that he would receive stocks in the amount of 5% ownership of the company and a yearly 5% raise. He has received neither. Does he have a legal case to get these compensations?

Asked on May 24, 2011 under Employment Labor Law, Virginia

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

One of the theories of contract law is that the terms are negotiated as between the parties and that the parties execute the agreement with a full understanding of the terms and of their own free will.  If one of the party defaults on the contract - does not abide by the terms negotiated and agreed to - then the other party has the right to enforce the contract through what ever channels are permitted.  Sometimes the contract itself limits the remedies of the parties (like a clause that states that disputes must be arbitrated) but otherwise you can sue in Court as well.  I would have an attorney review the contract for you.  Good luck.  


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