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Understanding precedence clauses in employment contracts

On Behalf of | Dec 6, 2023 | Business Law |

When reviewing an employment contract, we already know to look for restrictive clauses and similar provisions to ensure they are valid. However, there are special clauses that not all workers may be familiar of, one of which are precedence clauses.

A clause addressing inconsistency.

A precedence clause is a provision in a contract that states that if there is any conflict or inconsistency between the terms of the contract and other documents, the terms that are specified in the precedence clause will take priority over others. There is a uniform format for this clause that employers follow.

For instance, if there is a discrepancy between an employment contract and policy manual, the precedence clause would indicate which document’s provisions would take precedence.

It does not absolve employers of unambiguity.

While precedence clauses provide clarity in case of discrepancies, employers should not always rely on them. Instead, the standard is to make all contracts and documents consistent with each other, leaving no room for interpretation. If there are other alternatives, employers should explore them first.

Ambiguity can lead to serious consequences.

Discrepancies in contracts and company policies can result in legal repercussions, even with the existence of precedence clauses.

To avoid these issues, employers should always have their legal documents reviewed by a legal professional to ensure they meet the legal requirements and protect the interests of the parties involved.

Moreover, employees should meticulously review their contracts before signing to ensure their rights remain protected. If there are confusing provisions which can potentially harm their rights, employees can seek the aid of a knowledgeable legal professional to explore their remedies.