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Assignment Agreement Template

Use our assignment agreement to transfer contractual obligations.

Updated February 1, 2024 Written by Josh Sainsbury | Reviewed by Brooke Davis

An assignment agreement is a legal document that transfers rights, responsibilities, and benefits from one party (the “assignor”) to another (the “assignee”). You can use it to reassign debt, real estate, intellectual property, leases, insurance policies, and government contracts.

What Is an Assignment Agreement?

What to include in an assignment agreement, how to assign a contract, how to write an assignment agreement, assignment agreement sample.

Partnership Interest

An assignment agreement effectively transfers the rights and obligations of a person or entity under an initial contract to another. The original party is the assignor, and the assignee takes on the contract’s duties and benefits.

It’s often a requirement to let the other party in the original deal know the contract is being transferred. It’s essential to create this form thoughtfully, as a poorly written assignment agreement may leave the assignor obligated to certain aspects of the deal.

The most common use of an assignment agreement occurs when the assignor no longer can or wants to continue with a contract. Instead of leaving the initial party or breaking the agreement, the assignor can transfer the contract to another individual or entity.

For example, imagine a small residential trash collection service plans to close its operations. Before it closes, the business brokers a deal to send its accounts to a curbside pickup company providing similar services. After notifying account holders, the latter company continues the service while receiving payment.

Create a thorough assignment agreement by including the following information:

• Effective Date:  The document must indicate when the transfer of rights and obligations occurs.
• Parties:  Include the full name and address of the assignor, assignee, and obligor (if required).
• Assignment:  Provide details that identify the original contract being assigned.
• Third-Party Approval: If the initial contract requires the approval of the obligor, note the date the approval was received.
• Signatures:  Both parties must sign and date the printed assignment contract template once completed. If a notary is required, wait until you are in the presence of the official and present identification before signing. Failure to do so may result in having to redo the assignment contract.

Review the Contract Terms

Carefully review the terms of the existing contract. Some contracts may have specific provisions regarding assignment. Check for any restrictions or requirements related to assigning the contract.

Check for Anti-Assignment Clauses

Some contracts include anti-assignment clauses that prohibit or restrict the ability to assign the contract without the consent of the other party. If there’s such a clause, you may need the consent of the original parties to proceed.

Determine Assignability

Ensure that the contract is assignable. Some contracts, especially those involving personal services or unique skills, may not be assignable without the other party’s agreement.

Get Consent from the Other Party (if Required)

If the contract includes an anti-assignment clause or requires consent for assignment, seek written consent from the other party. This can often be done through a formal amendment to the contract.

Prepare an Assignment Agreement

Draft an assignment agreement that clearly outlines the transfer of rights and obligations from the assignor (the party assigning the contract) to the assignee (the party receiving the assignment). Include details such as the names of the parties, the effective date of the assignment, and the specific rights and obligations being transferred.

Include Original Contract Information

Attach a copy of the original contract or reference its key terms in the assignment agreement. This helps in clearly identifying the contract being assigned.

Execution of the Assignment Agreement

Both the assignor and assignee should sign the assignment agreement. Signatures should be notarized if required by the contract or local laws.

Notice to the Other Party

Provide notice of the assignment to the non-assigning party. This can be done formally through a letter or as specified in the contract.

File the Assignment

File the assignment agreement with the appropriate parties or entities as required. This may include filing with the original contracting party or relevant government authorities.

Communicate with Third Parties

Inform any relevant third parties, such as suppliers, customers, or service providers, about the assignment to ensure a smooth transition.

Keep Copies for Records

Keep copies of the assignment agreement, original contract, and any related communications for your records.

Here’s a list of steps on how to write an assignment agreement:

Step 1 – List the Assignor’s and Assignee’s Details

List all of the pertinent information regarding the parties involved in the transfer. This information includes their full names, addresses, phone numbers, and other relevant contact information.

This step clarifies who’s transferring the initial contract and who will take on its responsibilities.

Step 2 – Provide Original Contract Information

Describing and identifying the contract that is effectively being reassigned is essential. This step avoids any confusion after the transfer has been completed.

Step 3 – State the Consideration

Provide accurate information regarding the amount the assignee pays to assume the contract. This figure should include taxes and any relevant peripheral expenses. If the assignee will pay the consideration over a period, indicate the method and installments.

Step 4 – Provide Any Terms and Conditions

The terms and conditions of any agreement are crucial to a smooth transaction. You must cover issues such as dispute resolution, governing law, obligor approval, and any relevant clauses.

Step 5 – Obtain Signatures

Both parties must sign the agreement to ensure it is legally binding and that they have read and understood the contract. If a notary is required, wait to sign off in their presence.

Related Documents

• Sales and Purchase Agreement : Outlines the terms and conditions of an item sale.
• Business Contract : An agreement in which each party agrees to an exchange, typically involving money, goods, or services.
• Lease/Rental Agreement : A lease agreement is a written document that officially recognizes a legally binding relationship between two parties -- a landlord and a tenant.
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Ignite Success with an Effective Assignment and Assumption Agreement: A Comprehensive Guide

LegalGPS : July 29, 2024 at 9:05 AM

Running a successful business is all about staying on top of your game—and that includes being able to navigate legally complex situations with ease. One concept that often comes up in the world of contracts is the assignment and assumption agreement. If you're a business owner who needs a quick yet comprehensive rundown of what an assignment and assumption agreement is and how to create one, you've come to the right place.

Assignment and Assumption Agreement Template

Legal GPS templates are drafted by top startup attorneys and fully customizable.

In this guide, we'll walk you through the ins and outs of assignment and assumption agreements, and even provide you with a step-by-step explanation of how to put one together. So grab your favorite cup of coffee and let's get started!

Being able to efficiently manage and transfer contractual rights and obligations is crucial for businesses of all sizes. Whether you're selling a portion of your company or entering into a new partnership, having a solid assignment and assumption agreement in place can save you time, resources, and potential legal headaches down the line.

That being said, it's important to ensure that your assignment and assumption agreement is accurate, comprehensive, and tailored to suit your specific needs. And that's where this guide comes in. We'll help you understand the role of assignment and assumption agreements in your business and give you the tools you need to create one with confidence.

What is an Assignment and Assumption Agreement?

Before we dive into the nitty-gritty of creating an assignment and assumption agreement, it's important to understand what it is and why it's important for your business. In simple terms, an assignment and assumption agreement is a legal document that transfers the rights and obligations of one party (the "assignor") in an existing contract to another party (the "assignee"). Essentially, it allows one party to step out of a contract and another party to step in, taking over the original party's rights and responsibilities.

An assignment and assumption agreement typically serves a few key purposes, including:

Transferring ownership or control of assets

Refinancing debt or other financial arrangements

Splitting or consolidating business entities

A well-crafted agreement not only helps ensure a smooth transition but also protects all parties involved from potential misunderstandings and disputes.

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The Importance of an Accurate Assignment and Assumption Agreement

Now that you have an idea of what an assignment and assumption agreement entails, let's talk about why it's so important to get it right. Without a solid agreement in place, both the assignor and the assignee can face a whole host of problems, from miscommunications to legal disputes.

For one, an unclear or vague agreement can leave both parties open to misinterpretation and misunderstanding, which can result in disputes down the line. This is especially true when considerable assets or financial interests are at stake—having an accurate agreement in place helps protect both parties from future legal battles.

Moreover, without an agreement that specifically assigns rights and obligations to the assignee, the original parties to the contract may still be bound by its terms. This can give rise to unwanted legal complications and may even defeat the purpose of entering into the assignment and assumption agreement in the first place.

In short, a well-written assignment and assumption agreement protects both parties and helps prevent future misunderstandings and disputes.

How to Write an Assignment and Assumption Agreement: Step-by-Step Guide

Now that we've covered why having an accurate assignment and assumption agreement is so crucial, let's walk through how to write one. Keep in mind that every contract is unique, so your agreement should be tailored to your specific situation.

Step 1: Identifying Parties and their Roles

The first step in creating an assignment and assumption agreement is to clearly identify the parties involved and their respective roles. This typically includes the assignor, assignee, and the original counterparty to the contract (the "obligor"). Be sure to include the legal names and contact information for each party, including any business entities, individuals, or other parties that may be involved.

Moreover, all parties should be represented by a lawyer who is licensed to practice law in the state where the property is located.

Step 2: Describing the Original Contract

The next step is to describe the original contract being assigned and assumed, also known as the "underlying contract." This should include a brief description of the terms and conditions of the underlying contract, as well as the date on which it was executed. You may also want to include a reference to the specific section(s) of the underlying contract that permit assignment, if applicable.

For example, if the underlying contract is a lease agreement, you may want to point out that the lease allows for assignment.

Step 3: Detailing the Assignment and Assumption

Now, it's time to get into the heart of the agreement—the actual assignment and assumption. In this section, you'll need to outline the specific rights and obligations being transferred from the assignor to the assignee, including any limitations or conditions related to the transfer.

You should also identify the effective date of the assignment and assumption, which may be the date on which the agreement is executed, or a later date specified by the parties. In some cases, you may also need to consider any rights or obligations that will remain with the assignor after the assignment and assumption take effect.

Step 4: Consent of the Obligor

In some cases, the assignment and assumption of a contract may require the consent of the obligor. If this is the case, you should include a section in your agreement describing the obligor's consent, including any conditions or limitations on the consent, if applicable.

This is important because if the obligor does not consent or if there are conditions on the consent, it may prevent your assignment and assumption from taking effect.

Step 5: Governing Law and Jurisdiction

It's crucial to establish which laws will govern your assignment and assumption agreement, in case any disputes arise later on. Include a section specifying the state or country whose laws will apply to the agreement, as well as the jurisdiction where any legal disputes will be resolved.

However, make sure the law you choose is not one that would be considered unfair to either party. For example, if one of your companies is based in a state that has laws favorable to creditors and the other company is based in a state with more favorable laws for debtors, it may be best to choose another state as your governing law.

Step 6: Signatures

Finally, the last step in creating an assignment and assumption agreement is to have all parties sign and date the document. This is typically done at the end of the agreement, after all terms and conditions have been outlined. Be sure to include lines for the signatures of the assignor, assignee, and the obligor (if their consent is required), as well as a space for each party to print their name and title, if applicable.

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Pros and Cons of Using an Assignment and Assumption Agreement Template

When it comes to creating an assignment and assumption agreement, you might be considering using a contract template. While templates definitely have their advantages, such as saving time and ensuring that you cover all of the necessary legal bases, there are also some potential downsides to be aware of.

One major advantage of using a template is that it can save you time by providing a well-structured starting point for your agreement. Templates also generally include the essential sections and clauses that most agreements need, helping to ensure that your agreement is legally compliant and thorough.

The main disadvantage of using a generic template is that it may not be tailored precisely to your specific needs. This can result in an agreement that doesn't fully address the nuances of your situation or provide adequate protection for all parties involved. If you're unsure about whether a template is appropriate for your situation, you should consider consulting a legal professional or purchasing a customizable contract template that can be adapted to your specific circumstances.

The Benefits of Choosing Our Contract Template

There's no doubt that a well-designed contract template can be a game-changer when it comes to drafting assignment and assumption agreements. And that's where our expertly crafted template comes into play. Here's what sets our template apart:

Designed by legal professionals with years of experience

Simplified language for easier understanding

Customizable to suit your specific needs and requirements

By choosing our contract template, you can feel confident knowing that you're getting a legally compliant and strategically sound agreement that's tailored to your situation. So why wait? Purchase our expertly designed assignment and assumption agreement template and ensure your business's success today!

In the world of business, contracts play a crucial role in protecting your assets and interests. And when it comes to assignment and assumption agreements, accuracy and clarity are key. We hope this comprehensive guide has given you the tools and understanding you need to confidently create your own assignment and assumption agreements.

Ready to make your life easier? Grab our expertly designed assignment and assumption agreement template today and streamline your business operations with confidence!

Get Legal GPS's Assignment and Assumption Agreement Template Now

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This employment agreement is between , an individual a(n) (the " Company ") and , an individual (the " Employee ").

The Company is engaged in the business of .

The Company desires to employ the Employee, and the Employee wishes to enter into that employment, as set forth in this agreement.

The parties therefore agree as follows:

1. EMPLOYMENT.

• (a) Position . The Company hereby employs the Employee in the position of and the Employee hereby accepts this employment as of the effective date (as defined in section , the "Effective Date" ). During his or her employment with the Company, the Employee shall devote his or her best efforts and substantially all of his or her business time and attention (except for vacation periods and reasonable periods of illness or other incapacities permitted by the Company's general employment policies) to the business of the Company.
• (b) Duties. The Employee shall perform duties that are customarily associated with his or her then-current title, consistent with the operating agreement bylaws organizing documents organizing documents organizing documents organizing documents of the Company and as required by the Company. The Employee shall perform his or her duties at any place or places as the Company reasonably designates.
• (c) Company Policies. The employment relationship between the parties will also be governed by the general employment policies and practices of the Company. If any terms of this agreement differ from or conflict with the Company's general employment policies or practices, this agreement will control.
• (d) At-Will Status. THE EMPLOYEE ACKNOWLEDGES THAT EMPLOYMENT WITH THE COMPANY IS FOR AN UNSPECIFIED DURATION AND CONSTITUTES "AT-WILL" EMPLOYMENT. THE EMPLOYEE FURTHER ACKNOWLEDGES THAT THIS EMPLOYMENT RELATIONSHIP MAY BE TERMINATED AT ANY TIME, WITH OR WITHOUT GOOD CAUSE OR FOR ANY OR NO CAUSE, AT THE OPTION OF EITHER THE COMPANY OR THE EMPLOYEE, WITH OR WITHOUT NOTICE.

2. TERM AND TERMINATION.

• (a) Term. The term of this agreement will begin on and continue until terminated by either party in accordance with subsection (b) or by law. The period during which the Employee is employed under this agreement is referred to as the " Employment Period ."
• (b) Termination. Either party may, at any time, with or without cause, terminate this agreement by giving days' written notice to the other party. If requested by the Company, the Employee shall continue to render his or her services pursuant to this agreement during this notice period, and will be paid his or her regular compensation until the last day of the Employee's employment (the "Termination Date" ). On the Termination Date, the Company shall pay the Employee a severance allowance of $ . Any amounts outstanding or owed by the Employee to the Company may be deducted from this severance allowance.

3. COMPENSATION.

The Employee will be compensated for his or her services as follows:

• (a) Base Salary. The Company shall pay the Employee an annual base salary of $ (the "Salary" ), payable in equal monthly bimonthly semi-monthly weekly biweekly installments at the end of each period during the Employment Period. The Salary may be subject to increases, as those may be determined from time to time by the Company.
•   (b) Signing Bonus. Within days of the effective date, the Employee shall receive a sign-on bonus of $ . If the Employee is terminated for cause or if the Employee terminates employment within year(s) of the Effective Date, the Employee must make a pro-rated repayment of the sign-on bonus.
• (b) (c)   Incentive Compensation.   In accordance with the Company's practices, policies, and procedures, the Employee may be eligible for a discretionary bonus award (the " Bonus "). The Bonus, if any, will be based on the performance of the Company and the Employee and will be subject to typical payroll deductions and withholdings. A Bonus is not guaranteed compensation.
• (b) (c) (c) (d) Other Nonmonetary Benefits.  The Employee is entitled to certain other nonmonetary benefits, including vacation days, sick days, holidays, and paid time off, and medical plan   and    and  dental plan   and  other : , in accordance with Company policies, which may be amended from time to time.
• (c) (d) (d) (e) Stock Options. After full year(s) of employment, the Employee will be considered for participation in the Company's stock option plan in accordance with the terms of that plan.
• ( c d d d e e e f ) Withholding. All sums payable to the Employee under this agreement will be reduced by federal, state, local, and other withholdings and similar taxes and payments required by applicable law.

4. OTHER EMPLOYMENT.

The Employee shall devote all of his or her time and attention solely to the Company's business and interest. During the Employment Period, the Employee may not engage, directly or indirectly, in any other business activity, regardless of whether it is pursued for gain or profit. Nothing in this section 4 limits the Employee's right to invest his or her money in real estate or in other companies if that investment does not oblige the Employee to assist in the operation of the affairs of those companies.

5. EXPENSES.

The Company shall reimburse the Employee for all business expenses incurred by the Employee in connection with his or her duties under this agreement in accordance with the Company's normal policies. The reimbursement of these expenses is subject to the Employee's provision to the Company of receipts, statements, and vouchers to the Company's satisfaction.

6. CONFIDENTIALITY.

• (a) Confidentiality. During the Employment Period, the Employee may have access to or receive certain information about the Company that the Company designates as confidential or that, under the circumstances surrounding disclosure, ought to be treated as confidential by the Employee (" Confidential Information "). Confidential Information includes information relating to the Company or its current or proposed business, financial statements, budgets and projections, customer identifying information, potential and intended customers, employers, products, computer programs, specifications, manuals, software, analyses, strategies, marketing plans, business plans, and other confidential information, provided orally, in writing, by drawings, or by any other media. The Employee will treat the Confidential Information as confidential and will not disclose it to any third party or use it for any purpose but to fulfill his or her obligations in this agreement. In addition, the Employee shall use due care and diligence to prevent the unauthorized use or disclosure of that information.
• (i) was or becomes publically available other than as a result of a disclosure by the Employee in violation of this agreement;
• A. the source of that information is not bound by a confidentiality agreement with the Company or
• is not otherwise prohibited from transmitting the information to the Employee by a contractual, legal,
• fiduciary, or other obligation; and
• B. the Employee provides the Company with written notice of his or her prior possession either (I)
• before the effective date of this agreement or (II) if the Employee later becomes aware (through
• disclosure to the Employee) of any aspect of the Confidential Information as to which the Employee
• had prior possession, promptly on the Employee so becoming aware;
• A. provide the Company with prompt notice of these requests or requirements before making a
• disclosure so that the Company may seek an appropriate protective order or other appropriate
• remedy; and
• B. provide reasonable assistance to the Company in obtaining a protective order.
• If a protective order or other remedy is not obtained or the Company grants a waiver under this agreement, the Employee may furnish that portion (and only that portion) of the Confidential Information that, in the written opinion of counsel reasonably acceptable to the Company, the Employee is legally compelled or otherwise required to disclose. However, the Employee shall make reasonable efforts to obtain reliable assurance that confidential treatment will be accorded any part of the Confidential Information disclosed in this way; or
• (iv) was developed by the Employee independently without breach of this agreement.
• (i) Confidentiality. At all times during his or her employment with the Company, the Employee shall hold in strictest confidence, and not use, except for the benefit of the Company, or to disclose to any person, firm, or corporation without the prior written authorization of the Company, any of the Company's Confidential Information.
• (ii) Term. The Employee shall maintain the confidentiality and security of the Confidential Information until the earlier of: (A) such time as all Confidential Information disclosed under this agreement becomes publicly known and is made generally available through no action or inaction of the Employee or (B) the  anniversary of the termination of the Employee's employment with the Company. However, to the extent that the Company has disclosed information to the Employee that constitutes a trade secret under law, the Employee shall protect that trade secret for as long as the information qualifies as a trade secret.
• (d) Remedy. Money damages may not be a sufficient remedy for a breach of this section by the Employee and, in addition to all other remedies, the Company may seek (and may be entitled to) as a result of that breach, specific performance and injunctive or other equitable relief as a remedy.

7. INVENTIONS.

• (a) Inventions Retained and Licensed. Attached as Exhibit A to this agreement is a list of all intellectual property that the Employee made before his or her employment with the Company (the "Prior Inventions" ) that belong to the Employee, that relate to the Company's proposed business, products, or research and development, and that are not assigned to the Company under this agreement. If no list is attached, the Employee represents that there are no Prior Inventions. If disclosure of any Prior Invention would cause the Employee to violate a prior confidentiality agreement, the Employee will not list the Prior Invention in Exhibit A but will provide a name of the invention, a list of the party or parties it belongs to, and the explanation why full disclosure was not given. A space is provided in Exhibit A for this purpose. If in the course of employment with the Company, the Employee incorporates into a Company product, process, or machine a Prior Invention owned by the Employee or in which the Employee has an interest, the Company will be granted and have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use, and sell that Prior Invention as part of or in connection with that product, process, or machine.
• (i) while the Employee is or was performing duties for the Company;
• (ii) during the Employee's employment with the Company, if it relates to the Company's areas of business or investigations;
• (iii) that results from or is suggested by any work that the Employee does for the Company or at the Company's request; or
• (iv) that was aided by the Employee's use of the Company's equipment, supplies, facilities, or trade secret information, whether or not during working hours.
• This Employee-created intellectual property is referred to in this agreement as "Inventions."
• The Employee acknowledges that any Invention the Employee makes within the scope of and during his or her employment with the Company and that is protectable by copyright is a "work made for hire," as that term is defined in the United States Copyright Act.
• (c) Maintenance of Records. The Employee shall keep and maintain adequate and current written records of all Inventions the Employee makes (solely or jointly with others) during the term of employment with the Company. The records may be in the form of notes, sketches, drawings, and any other format specified by the Company. The records will be available to and remain the sole property of the Company at all times.
• (d) Patent and Copyright Registrations. The Employee shall help the Company or its designee, at the Company's expense, secure the Company's rights in the Inventions and any copyrights, patents, mask work rights, or other intellectual property rights relating to the Inventions in all countries, including by disclosing to the Company all pertinent information and data about any of those, by signing all applications, specifications, oaths, assignments, and all other instruments that the Company may deem necessary to apply for and obtain those rights and to assign and convey to the Company, its successors, assigns, and nominees the exclusive interest in those Inventions, and any copyrights, patents, mask work rights, or other intellectual property rights relating to those. When it is in the Employee's power to do so, his or her obligation to sign or cause to be signed any such instrument or papers will continue after the termination of this agreement. If because of the Employee's mental or physical incapacity or for any other reason the Company cannot secure a signature to apply for or pursue any application of any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, the Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as the Employee's agents and attorneys in fact, to act for and on behalf of the Employee to sign and file those applications and do all other lawfully permitted acts to further the prosecution and issuance of patent or copyright registrations on them with the same legal force and effect as if signed by the Employee.

8. RETURN OF PROPERTY.

Within days of the expiration or earlier termination of this agreement, the Employee shall return to the Company, retaining no copies or notes, all Company products, samples, models, property, and documents relating to the Company's business including reports, abstracts, lists, correspondence, information, computer files, computer disks, and other materials and copies of those materials obtained by the Employee during and in connection with his or her work with the Company. All files, records, documents, blueprints, specifications, information, letters, notes, media lists, original artwork or creative work, notebooks, and similar items relating to the Company's business, whether prepared by the Employee or by others, remain the Company's exclusive property.

9. USE OF TRADEMARKS.

The Company may use, reproduce, and distribute the Company's service marks, trademarks, and trade names (if any) (collectively, the "Company Marks" ) in connection with his or her employment. Any goodwill received from this use will accrue to the Company, which will remain the sole owner of the Company Marks. The Employee may not engage in activities or commit acts, directly or indirectly, that may contest, dispute, or otherwise impair the Company's interest in the Company Marks. The Employee may not cause diminishment of value of the Company Marks through any act or representation. The Employee may not apply for, acquire, or claim an interest in any Company Marks, or others that may be confusingly similar to any of them, through advertising or otherwise. At the expiration or earlier termination of this agreement, the Employee will have no further right to use the Company Marks, unless the Company provides written approval for each use.

10. NONSOLICITATION.

During the Employment Period and for a period of year(s) after, the employee may not:

• (a) canvass or solicit the business of (or procure or assist in the canvassing or soliciting of) any client, customer, or employee of the Company who is known to the Employee because of his or her association with the Company during the Employment Period for the purposes of competing with the Company;
• (b) accept (or procure the acceptance of) business from a client, customer, or employee of the Company known to the Employee because of his or her association with the Company during the Employment Period for purposes of competing with the Company. However, the Company may consent to this competition in writing; or
• (c) otherwise contact, approach, or solicit (or procure the contacting, approaching, or soliciting of) an entity known to the Employee because of his or her association with the Company before the Effective Date in a way that could be detrimental to the Company.

11. NONCOMPETITION.

At the end of the Employment Period, by expiration or termination, the Employee may not engage, own, manage, control, operate, be employed by, participate in, or be connected with the ownership, management, operation, or control of a business similar to the type of business conducted by the Company for a period of years and within miles from the present location(s) of the Company's business. If the Employee breaches or threatens to breach this section, the Company will be entitled to a preliminary restraining order and injunction preventing the Employee from violating its provisions. Nothing in this agreement prohibits the Company from pursuing any other available remedies for a breach or threatened breach, including the recovery of damages from the Employee.

12. FIDELITY BOND.

At the beginning of the Employment Period, the Employee shall apply for a fidelity or surety bond from a company and in amounts that the Company may specify in its sole discretion. The Company shall pay all premiums on this bond. The bond will continue in force and in the amounts as the Company requires. If the bond is refused or is ever canceled without the Company's prior written approval, the Employee's employment may be terminated immediately and the Employee will be entitled to compensation to the date of that termination only.

13. DEATH DURING EMPLOYMENT.

If the Employee dies while employed by the Company, the Company shall pay to the Employee's estate any Salary otherwise payable to the Employee, up to the end of the month in which his or her death occurs. In addition, the Company shall pay $ to the Employee's widow or widower, or, if he or she is not survived by a spouse, to the Employee's surviving children in equal shares, or, if he or she is not survived by any children, to the Employee's estate, within days of the Employee's death.

14. INDEMNIFICATION.

• (i) the Employee's negligence or willful misconduct arising from the Employee's carrying out of his or her obligations under this agreement; or
• (ii) the Employee's breach of any of his or her obligations or representations under this agreement.
• (i) the Company's operation of its business;
• (ii) the Company's breach or alleged breach of, or its failure or alleged failure to perform under, any agreement to which it is a party; or
• (iii) the Company's breach of any of its obligations or representations under this agreement. However, the Company is not obligated to indemnify the Employee if any of these Claims result from the Employee's own actions or inactions.

15. FORCE MAJEURE.

A party will not be considered in breach or in default because of, and will not be liable to the other party for, any delay or failure to perform its obligations under this agreement by reason of fire, earthquake, flood, explosion, strike, riot, war, terrorism, or similar event beyond that party's reasonable control (each a " Force Majeure Event "). However, if a Force Majeure Event occurs, the affected party shall, as soon as practicable:

• (a) notify the other party of the Force Majeure Event and its impact on performance under this agreement; and
• (b) use reasonable efforts to resolve any issues resulting from the Force Majeure Event and perform its obligations under this agreement.

16.   ARBITRATION; EQUITABLE RELIEF. CHOICE OF LAW; ATTORNEYS' FEES; EQUITABLE RELIEF.

• (a) ARBITRATION. EXCEPT AS PROVIDED IN SECTION (b) BELOW, ANY DISPUTE OR CONTROVERSY ARISING OUT OF, RELATING TO, OR CONCERNING THE INTERPRETATION, CONSTRUCTION, PERFORMANCE, OR BREACH OF THIS AGREEMENT WILL BE GOVERNED BY LAW AND SETTLED BY ARBITRATION TO BE HELD IN  (a) Choice of Law. The laws of the state of govern this agreement (without giving effect to its conflicts of law principles). COUNTY, , IN ACCORDANCE WITH THE THEN-EFFECTIVE RULES OF THE AMERICAN ARBITRATION ASSOCIATION. THE ARBITRATOR MAY GRANT INJUNCTIONS OR OTHER RELIEF IN THAT DISPUTE OR CONTROVERSY. THE DECISION OF THE ARBITRATOR WILL BE FINAL, CONCLUSIVE, AND BINDING ON THE PARTIES TO THE ARBITRATION. JUDGMENT MAY BE ENTERED ON THE ARBITRATOR'S DECISION IN ANY COURT HAVING JURISDICTION. THE PARTIES SHALL EACH PAY ONE-HALF OF THE COSTS AND EXPENSES OF THAT ARBITRATION, AND EACH PARTY SHALL SEPARATELY PAY COUNSEL FEES AND EXPENSES.
• (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in County, .
• (c) Attorneys' Fees. If either party employs attorneys to enforce any rights arising out of or relating to this agreement, the losing party shall reimburse the prevailing party for its reasonable attorneys' fees.
• (d) Equitable Relief. The Employee's breach of this agreement will cause irreparable harm to the Company and monetary damages may not be a sufficient remedy for an unauthorized disclosure of the Confidential Information. If the Employee discloses the Confidential Information in violation of this agreement, the Company may, without waiving any other rights or remedies and without posting a bond or other security, seek an injunction, specific performance, or other equitable remedy to prevent competition or further disclosure, and may pursue other legal remedies.
• (i) ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION;
• (ii) ALL CLAIMS FOR VIOLATION OF A FEDERAL, STATE, OR MUNICIPAL STATUTE, INCLUDING TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, AND THE FAIR LABOR STANDARDS ACT;
• (iii) ALL CLAIMS ARISING OUT OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
• (b) EQUITABLE REMEDIES. IT WOULD BE IMPOSSIBLE OR INADEQUATE TO MEASURE AND CALCULATE THE COMPANY'S DAMAGES FROM ANY BREACH OF THE COVENANTS SET FORTH IN SECTIONS , , ,   AND ,   AND    AND     AND    OF THIS AGREEMENT. ACCORDINGLY, IF THOSE SECTIONS ARE BREACHED, THE COMPANY WILL HAVE AVAILABLE, IN ADDITION TO ANY OTHER RIGHT OR REMEDY AVAILABLE, THE RIGHT TO OBTAIN AN INJUNCTION FROM A COURT OF COMPETENT JURISDICTION RESTRAINING THAT BREACH OR THREATENED BREACH AND TO SPECIFIC PERFORMANCE OF ANY SUCH PROVISION OF THIS AGREEMENT. NO BOND OR OTHER SECURITY WILL BE REQUIRED TO OBTAINING THAT EQUITABLE RELIEF AND THE EMPLOYEE HEREBY CONSENTS TO THE ISSUANCE OF THAT INJUNCTION AND TO THE ORDERING OF SPECIFIC PERFORMANCE.
• (c) CONSIDERATION. EACH PARTY'S PROMISE TO RESOLVE CLAIMS BY ARBITRATION IN ACCORDANCE WITH THIS AGREEMENT, RATHER THAN THROUGH THE COURTS, IS CONSIDERATION FOR THE OTHER PARTY'S LIKE PROMISE. THE EMPLOYEE UNDERSTANDS THAT THIS OFFER OF EMPLOYMENT IS MADE IN CONSIDERATION OF THIS PROMISE TO ARBITRATE CLAIMS.

17. AMENDMENTS.

No amendment to this agreement will be effective unless it is in writing and signed by both parties.

18. ASSIGNMENT AND DELEGATION.

• (a) No Assignment. The Employee may not assign any of his or her rights under this agreement, except with the prior written consent of the Company. All voluntary assignments of rights are limited by this subsection.
• (b) No Delegation. The Employee may not delegate any performance under this agreement, except with the prior written consent of the Company.
• (c) Enforceability of an Assignment or Delegation. If a purported assignment or purported delegation is made, or if both are made, in violation of this section, it is void and they are void.

19. COUNTERPARTS; ELECTRONIC SIGNATURES.

• (a) Counterparts. The parties may execute this agreement in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
• (b) Electronic Signatures. This agreement, agreements ancillary to this agreement, and related documents entered into in connection with this agreement are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.

20. SEVERABILITY.

If any provision in this agreement is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this agreement, but this agreement will be construed as if the invalid, illegal, or unenforceable provisions had never been contained in this agreement, unless the deletion of those provisions would result in such a material change that would cause completion of the transactions contemplated by this agreement to be unreasonable.

• (a) If any provision in this agreement is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this agreement, but this agreement will be construed as if the invalid, illegal, or unenforceable provisions had never been contained in this agreement, unless the deletion of those provisions would result in such a material change that would cause completion of the transactions contemplated by this agreement to be unreasonable.
• (b) If the restrictions against   solicitation in section    and   competition in section    of this agreement are found by a court of competent jurisdiction to be unenforceable because they extend for too long a period of time or over too great a geographical area, or because they are too expansive in any other respect, these sections should be interpreted to extend only over the maximum period of time for which they are enforceable and over the maximum geographical areas as to which they are enforceable, and to the maximum extent in all other respects as to which they are enforceable, all as determined by that court in that action.

21. NOTICES.

• (a) Writing; Permitted Delivery Methods. Each party giving or making any notice, request, demand, or other communication required or permitted by this agreement shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this agreement: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email.
• (b) Addresses. A party shall address notices under this section to a party at the following addresses:
• If to the Company:

• If to the Employee:
• (c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice.

22. WAIVER.

No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this agreement will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.

23. ENTIRE AGREEMENT.

This agreement constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement with respect to the subject matter of this agreement. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this agreement are expressly merged into and superseded by this agreement. The provisions of this agreement may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this agreement by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this agreement. Except as set forth expressly in this agreement, there are no conditions precedent to this agreement's effectiveness.

24. HEADINGS.

The descriptive headings of the sections and subsections of this agreement are for convenience only, and do not affect this agreement's construction or interpretation.

25. EFFECTIVENESS.

This agreement will become effective when all parties have signed it. The date this agreement is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this agreement.

26. NECESSARY ACTS; FURTHER ASSURANCES.

The parties shall use all reasonable efforts to take, or cause to be taken, all actions necessary or desirable to consummate and make effective the transactions this agreement contemplates or to evidence or carry out the intent and purposes of this agreement.

[SIGNATURE PAGE FOLLOWS]

Each party is signing this agreement on the date stated opposite that party's signature.

[PAGE BREAK HERE]

1. Except as listed in section 2 below, the following is a complete list of all Prior Inventions that were made, conceived, or first reduced to practice by the Employee, alone or jointly with others, before its agreement with the Company:

2. Because of an existing confidentiality agreement and the duties of confidentiality that the Employee owes to the parties listed below, the Employee cannot complete the disclosure in section 1 above with respect to the inventions or improvements listed generally below:

Free Employment Agreement Template

How-to guides, articles, and any other content appearing on this page are for informational purposes only, do not constitute legal advice, and are no substitute for the advice of an attorney.

Employment agreement: How-to guide

Having a good start to an employment relationship and making a positive first impression on a new hire is essential to establishing a productive, successful, and professional workplace. An important part of this process is creating an employment agreement.

There are many advantages to having a well-crafted employment agreement, the most obvious of which is the legal protection it provides to a company or business. By providing written employment terms that include details of compensation, position, employment policies, and at-will status, the company creates a legal document that, when signed, can prove valuable if disputes occur.

What is an employment contract?

An employment agreement, commonly called an employment contract or employee contract, contains all the essential terms and conditions of the employment. From an employee agreement, an employee understands their duties towards the company. It also provides employees with information about the:

• Company policy
• Employee’s job title
• Salary details
• Probationary period
• Sick leave, personal leave, and vacation time off
• Date of joining
• Confidential information that employees should keep a secret

A written employee agreement lists employment terms, limiting later confusion and disagreement about those provisions. Clearly drafted employment contracts not only eliminate ambiguities but also establish a better employer and employee-working relationship. Employment contracts are created in the best interests of the company and the new employees. It helps to build mutual understanding and promotes good faith.

Difference between an employment agreement and an independent contractor agreement

An employment agreement differs from an   independent contractor agreement .

An employment contract hires an individual as a part-time or full-time employee. On the other hand, through a contractor agreement, professional experts are hired as independent contractors. An independent contractor doesn’t get any of the employee benefits like:

• Paid vacation time
• Personal leave and sick leave
• Health insurance
• Retirement plans and benefits
• Monthly salary - An independent contractor is paid for the services rendered for the company they are hired by
• Employee’s job title    

Guidelines to create an all-inclusive employment contract

Clarify and reach a consensus before making the agreement in writing.

A good employment agreement is one that captures the intentions of the parties accurately. It’s a good idea to clarify the potential employee’s job duties and responsibilities, and his or her compensation package, before writing them down.

Refrain from adding unmet promises in your contract

Do not promise raises, bonuses, or other business perks if those are not guaranteed. Do not include anything that is not an absolute. Many lawsuits are predicated on misunderstandings related to expected bonuses. If you have a simple bonus calculation applicable to this employee, include that information in the agreement.

Provide reimbursement details   

If the company will reimburse or provide funds for moving expenses, include that information here and make your language precise.

Avoid customizing legal clauses on your own 

Do not alter the at-will language or insert terms that conflict with that language (for example, references to long-term employment). Nothing in the contract should contradict your arrangement for at-will employment.

Add non-disclosure clause

A non-disclosure clause in which the employee agrees to keep the company’s private information private is effective from the beginning of the employment. A departing employee’s ability to use confidential information will continue to be effective, and you will not need to negotiate with a potentially hostile party to ensure this limitation.

Include non-compete clause

If you include a clause that limits a departing employee’s ability to compete with the company, make sure the scope and reach of this clause is reasonable. Although some states’ courts enforce these clauses as a matter of course, many others (including California) view them unfavorably and will not enforce them unless the restrictions are very narrow. There must be a correlation between the time period for the limitation and the need for the clause. In other words, this clause can only be for as long as it would take for an employer to overcome any potential competitive disadvantage.

Mention state law for dispute resolution

If you want a specific state’s laws to resolve any employment disputes, specify that state in the employment agreement. Courts will generally honor the parties’ choice of law if the state selected has a connection to the dispute.

Enforce obligations under the employee agreement

The provisions of an employment agreement will bind your employee strictly only if you follow them to the letter. In other words, you can enforce its terms against your employee if you do not violate your own obligations under the agreement. For example, your employee will not be bound by the terms of a non-competition clause if you try to end the agreement without giving the required notice or termination date.

Make the exit interview a part of the process

Nothing lasts forever, and this is certainly true of employment. At the end of an employment relationship, your company should conduct an exit interview, and you should consider putting this as a requirement in his or her employment agreement. At this meeting, the employee should be reminded of his or her continuing obligations to the company, including maintaining the confidentiality of information beyond the termination of the employment period. You can also use this time to resolve misunderstandings and smooth ruffled feathers, perhaps limiting later termination-related lawsuits.

Provide ample time to review the employment contract

Allow the employee to spend time reviewing the agreement. This will reduce the likelihood, or at least the efficacy, of a claim that he or she did not understand any terms or how those might affect the agreement as a whole.

Both parties should review the completed document carefully to ensure that all relevant points have been included. It is better to be over-inclusive than under-inclusive. Do not assume that certain expectations or terms are agreed to if they are not stated expressly in the document.

Produce two copies of the signed employment agreement

Once the employee and employer agree to the terms of the employment, they can sign the agreement and make it official. The employer and the employee must sign two copies of the agreement, one is kept by the employer, and the other is given to the new employee.

If your agreement is complicated, it is always good to contact an attorney to help you draft a document that will meet your specific needs.

Get the contract signed

Regardless of the nature of your arrangement, the employment agreement should be signed before the employee starts work.

Key elements of an employment agreement 

The following instructions will help you understand the terms of your employment agreement.

Introduction of parties

This part gives employer and employee details like their name and contact information. The employer is the party that will be hiring the employee. While giving the employer details you can also mention what type of entity it is, e.g., corporation, limited liability company, etc.

You must also write the date on which the document is effective (usually when it is signed).

Recitals are the “whereas” clauses that define the agreement's world and offer key background information about the involved parties. In an employment contract, this section includes a simple statement of the parties’ intent to enter an employment relationship.

In the background section, describe the employer’s business activities in detail. Note that this description could have a long-term impact on both parties.

There are also certain clauses in an employment contract that restrict the employee’s ability to compete with the employer in its industry after his or her employment ends. If the employer’s business is defined too broadly, the employee might not be able to find any employment at all! Make sure both parties agree on the business definition that is provided.

This section confirms the parties’ agreement to enter into an employment relationship. Note that the employment will be “at will.” This means that it can be ended by either party at any time for no specific reason.

Enter the date on which the agreement starts. Note that there is no definite “term” for the relationship. Unless either party ends the agreement, it will continue.

Compensation

Provide details of the employee’s salary and other benefits to be received in exchange for his or her work.

• Base salary : Enter the employee’s annual salary and explain how this will be paid (e.g., weekly, bi-monthly, monthly, etc.).
• Non-salary benefits : This subsection allows you to list any other compensation the employee may receive. For example, if the employee will receive pension benefits or relocation expenses as part of his or her compensation, you can detail those here.
• Vacation : Enter the number of paid vacation days the employee is entitled to in a given year.
• Signing bonus : An optional provision requiring the employer to pay the employee a certain amount for agreeing to work at the employer’s offices. This may be included in an executive agreement as an additional incentive for accepting a job. If you include this section, enter the amount of the signing bonus that will be paid and when it will be paid. Note that if the employee stops working for the employer within a certain amount of time, he or she will be required to pay back this signing bonus. You also need to mention what time period it would be.
• Performance bonus : This provision rewards the employee for hitting certain specified performance goals. According to the terms here, the employee’s bonus compensation will be calculated according to the employer’s bonus plan. Note that most employment agreements do not include specific information about an employee’s bonus. However, if you want to add additional provisions about the employee’s performance bonus, feel free to do so here.
• Stock options : This section allows the employee to participate in any stock option plan the employer has after a certain number of years. If you want to include this clause, enter the length of time it will take for the employee to qualify for this plan.
• Other benefits : A catch-all provision simply stating that the employee may receive other benefits of the sort that other employees of his or her position receive.
• Withholding : States that the amounts that will be paid to the employee may have deductions taken from them to satisfy tax requirements.

Responsibilities and duties

Describe what the employee is expected to do as part of his or her job. This should be as specific as possible for both parties’ benefit.

For the employee, it is important to know what is expected of him or her.

For the employer, defining the employee’s work duties will make clear, from an intellectual property perspective, what the employer can claim to own under the work-product doctrine (which states that things created in the course of the employee’s employment are owned by the employer).

Provide the location where the employee will provide his or her services, which may simply be the employer’s main place of business.

Other employment

This section clarifies that the employee is not allowed to work for other companies during the employment period. However, they can invest in other companies if they don’t require the employee’s help to operate.

Working amenities

An optional provision indicating that the employee will be given certain extras to create a more comfortable work environment (e.g., a private office, personal computer, etc.).

If the employee pays his or her own money to cover any reasonable expenses relating to official employer business (e.g., travel expenses, client dinners, etc.), the employer promises to reimburse that money. The employer agrees to provide proof of payment of these expenses to the employer’s satisfaction.

Confidentiality

During the employment period, the employee is not allowed to give any private information to outside parties without the employer’s consent. “Confidential information” includes any information about the employer not generally available to the public.

Non-solicitation

This provision is meant to prevent the employee from luring away key employees or customers from the employer if he/she stops working for the employer. According to this, the employee should not ask or lure any such individuals to accept positions as employees or clients of the employee.

This provision lasts only for a certain time after the employment period ends. Enter the amount of time this restriction will last. Make sure this is a reasonable time period: courts may overturn a provision that is for too long or for too large an area.

Non-competition or non-compete clause

An optional provision providing that the employee will not enter any business that competes with the employer for a certain period of time after the end of the agreement.

This clause is subject to very specific state guidelines. Please conduct additional research to ensure that the language is drafted very narrowly and according to state law.

In addition, non-compete clauses may be unenforceable for certain professions (e.g., in Delaware and Massachusetts, non-compete clauses for doctors are generally not allowed).

You also need to mention the time period for which this non-competition restriction runs.

Fidelity bond

A fidelity bond protects employers from losses they might experience because of their employees’ bad behavior (e.g., theft of company property).

Termination

Details the circumstances under which the agreement may be terminated. If the agreement is for “at will” employment, either party can end the agreement simply by giving the other party notice. You need to mention the notice period that must be given.

If the employer asks, the employee will continue to work during this notice period and will continue to receive salary payments until his or her last day of work.

There is also an optional clause where the employer can offer the employee a severance package. If the employee owes any money to the employer, the employer is given permission to deduct this amount from the pay offered.

Return of property

This is an extremely important provision, and although it may seem obvious to you that company property should be returned after an employee’s termination, it may not be as obvious to your employee. It is thus essential to communicate your return policy in the agreement (and reiterate it in your employee handbook, exit materials, and severance agreements), stating specifically that employees must return all company property before leaving your employment.

This section states that if the employee can’t perform his or her duties for a certain period of time because of an injury or illness, the employer can reduce his or her salary by a specific percentage.

Enter this amount of time (in weeks or months) and the percentage by which the salary would be decreased. Note that the employee will be entitled to full salary once he or she returns to work full-time.

The employer can end the agreement entirely if the employee’s absence lasts longer than a certain period. Mention the maximum time period that would lead to terminating this agreement.

Death during employment

This provision states that if the employee dies during the employment period, the employer will pay his or her salary to the employee’s relatives until the end of the month in which the death occurred. The employer also promises to pay a certain additional amount, which the parties have agreed upon.

Arbitration

A commonly used optional provision that requires the parties to resolve any disputes in arbitration (rather than in the courts). Arbitration can be quicker and cheaper than litigation for both parties. However, there may be local restrictions (or limitations in your industry) about using these clauses, so it’s a good idea to review laws governing arbitration in your area and in your field.

Lists the addresses to which all official or legal correspondence should be delivered. Write a mailing address for both the employer and the employee.

Successors and assigns

In the life of a company, there may be mergers, acquisitions, or sales of business divisions. On such occasions, the company may assign its agreement to a surviving entity or affiliate without obtaining the employee’s consent. Simply put, if the employer is purchased, the new company will not need to renegotiate this agreement: it will continue to be effective as is.

No implied waiver

Explains that even if one party allows the other party to ignore or break an obligation under the agreement, it does not mean that party waives any future rights to require the other party to fulfill those (or any other) obligations.

For example, say the agreement requires the employee to work 45 hours a week, but the employer only requires the employee to work 40 hours a week. Later, the employer could tell the employee to work 45 hours a week, as required in the agreement. If the employee claims that this right was “waived” because the employer didn’t enforce it, the employer can point to this section: its failure to enforce the provision at one point doesn’t mean it can’t enforce it later.

Governing law

Employees may work in one state and their employers in another. A governing law provision allows the employer to choose the state laws that will be used to interpret the agreement.

Counterparts; electronic signatures

This section says that even if the parties sign the agreement in different locations, or use electronic devices to transmit signatures (e.g., fax machines or computers), all of the separate pieces will be considered part of the same agreement.

In a modern world where signing parties are often not in the same city - much less the same room - this provision ensures that business can be transacted efficiently without sacrificing the validity of the agreement as a whole.

Severability

Protects the terms of the agreement as a whole, even if one part is later invalidated. For example, if a state law prohibits arbitration clauses, it will not undo the entire agreement. Instead, only the section dealing with arbitration would be invalidated, leaving the remainder of the agreement enforceable.

This part also discusses the non-competition and non-solicitation clauses. Because these clauses are delicate and run the risk of being termed too broad or overreaching, this subsection allows a court to limit the reach of these clauses rather than delete them altogether.

Entire agreement

The parties’ agreement that the document they’re signing is “the agreement” about the issues involved. Unfortunately, the inclusion of this provision will not prevent a party from arguing that other enforceable promises exist, but it will provide you some protection from these claims.

This part mentions that the headings at the beginning of each section are meant to organize the document. Any interpretation of the agreement should not be based on the headings.

Employment agreement template: Helping both the employer and the employee in the hiring process

Employment agreements are pretty long and exhaustive documents. Drafting them is often cumbersome and time-consuming. You must be careful while including various legal clauses in your agreement and should not leave room for misinterpretation. You also need to ensure that all important terms and conditions are included. For instance, you need to check whether certain important documents and clauses are included, like:

• Non-disclosure agreement (NDA) : Most employers include this document along with the employment agreement. A basic NDA makes the employee agree not to disclose information regarding the company. It asks its employees that during the time of employment and after resigning, they should not divulge any trade secrets or such confidential information to any third party.
• Non-compete clauses : A non-compete clause is nothing but a mandate where the employee agrees not to work in another company that is from the same industry and is your direct competitor. You can either include a clause or even have a separate agreement  specially created to include this provision.
• Confidentiality clauses : In a confidential clause, you need to mention what your company considers confidential and part of intellectual property.
• Non-solicitation clause : A  non-solicitation clause  restricts an outgoing or former employee from using the company’s client and customer information for personal gains. It prohibits the former employee from poaching or convincing the current employees to leave their jobs to join the new company.

The above clauses are some of the critical clauses of an employment contract. There might be other important clauses that you might want to include in your contracts. To avoid any misses in your employment contract, having a template handy with you can be helpful.

LegalZoom offers a comprehensive employment agreement template, making the contract creation process much easier. You can use our template, answer some guided questions, and download the document for free.

However, an employment contract template might not always meet your requirements. Oftentimes you have to edit and customize your employee agreement to suit your needs. For those scenarios, all you have to do is  purchase our form templates  plan and easily  customize the template  with the help of a rich editor.

Frequently asked questions

What's an employment agreement.

Give your new employees a clear understanding of hiring terms from day one. By providing employment terms such as compensation details, position title, and at-will status in a written employment agreement, your company creates a legal document that defines specifics for you and those who work for you. Additionally, a written agreement that lists employment terms may help prevent confusion or help resolve any later disputes. This could also offer some basic protections for you as an employer.

What information is required to complete a basic employment agreement?

Here's the information you'll need to have handy to complete your employment agreement:

• Who it's coming from : Determine if a business or individual is sending the document and have the name and contact information ready
• Who it's going to : Know who this document is going to and have the individual name and contact info ready
• Which state will govern it : Specify the state so it's clear which state's laws apply to the document
• Subject matter : Have a summary of the general nature of the new employee's job ready (e.g., design services for your marketing department)
• Dates : Be clear about when this agreement takes effect
• Compensation : Know the expected salary, frequency of payment, and any bonus they may be eligible for, as well as any additional benefits

Related categories

Related templates.

California General Contractor Agreement (Cost Plus Fee)

Collaborate with a California-based contractor using a general contractor agreement. Define clear payment terms of the project, including the actual cost and contractor's fee.

Employee Non-disclosure Agreement

Keep your employees informed about what is confidential and can't be disclosed to third parties. Safeguard the proprietary information with an employee NDA and maintain trust in the people working for you.

Extension of Agreement

Keep your successful collaboration going with an extension of agreement. Our template allows you to extend your partnership for a new time period easily.

General Contractor Agreement (Cost Plus Fee)

Build accountability and allow adjustments to your construction project. A general contractor agreement (cost plus fee) covers all project details upfront, ensuring both parties have a transparent and collaborative construction experience.

General Contractor Agreement (Stipulated Fee)

Use a general contractor agreement (stipulated fee) when paying a contractor a fixed amount for their services. Clearly define the project and payment terms.

Independent Contractor Agreement

Clearly define project terms and responsibilities when hiring contractors for your company. An independent contract agreement helps to lay out work schedules, payment terms, and other essential details.

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Gareth Wadley

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International assignments: Key issues to consider

What legal issues do you need to consider when it comes to sending employees overseas?

The number of employees working abroad is increasing. As it becomes more common, some assume this will lead to greater standardisation, with template assignment letters the norm.

However, the legal, tax, pension and other variables involved in international assignments require a more bespoke approach, leaving little room for standard documentation. We outline some key issues to address below.

What is an assignment?

Also referred to as a secondment or transfer, an assignment might be internal (to a different role abroad with the same employer) or to an external employer. A key characteristic of an international assignment is that an employee from one legal entity and country ('home' country) temporarily performs services in another country ('host' country).

Potential assignment structures

There are a number of different ways in which assignments can be structured and documented. Which approach is appropriate will depend on a range of issues including employment law, tax, pension, social security and regulatory implications as well as the expectations of employees. Five frequently used assignment structures are:

• the employee continues to be employed solely by the home employer;
• the contract with the home employer is suspended and the employee enters into a local employment contract with the host employer for the assignment;
• the contract with the home employer is terminated with a promise of re-employment at the end of the assignment. In the meantime, the employee enters into a local employment contract with the host employer;
• the contract with the home employer is suspended and the employee enters into a contract with an international assignment company (IAC) within the employer group; or
• the contract with the home employer is suspended and the employee enters into a contract with both an IAC and the host country employer.

Which is best?

When deciding on the best structure for the circumstances, some questions to consider are:

• Do the host country’s laws require employment by a local entity, ruling out sole employment by the home employer?
• Where there is no contract of employment in place with the host employer, could local laws presume that the host is the de facto employer?
• If the home contract is “suspended”, is the home employer prepared to accept the legal uncertainty, in employment law terms, that this status brings?
• In a dual contract structure, who will bear the greatest risk of being liable for employment claims – host, home (or the IAC)?
• Will the employee accept the termination of his/her home contract?
• What is the impact on pension and benefit schemes, social security and tax?

Are there key terms in the home contract that require special consideration and protection, for example, restrictive covenants and confidentiality?

Which national law applies, when and to what? Which courts would have jurisdiction in the event of a dispute?

Who pays for, and manages, the employee during the assignment and will the employee return to the home country?

Looking forward

It is inevitable that documenting assignments will become a smoother process as employers become more familiar with the issues involved. However, the range of significant personal, legal and financial implications will mean that a degree of tailoring will always be necessary, in order to avoid negative repercussions.

Gareth Wadley is principal associate at Eversheds

Further reading

Paying your way: International tax and benefits

Companies expect to increase international assignments

How HR can improve LGBT+ employees' access to international assignments

How territorial jurisdiction works

How to get the most out of global mobility

Hot topic: Key issues for the new government

Three-quarters of Europeans would consider international roles

Rise of 'global nomads' causes problems for employee benefits strategy, Mercer study shows

International assignments: Five steps to seconding an employee overseas

With more organisations seeking business opportunities abroad, international assignments are proving to be a convenient way to ensure that employees with the relevant skills and knowledge are in the right place at the right time. There are many factors with which organisations considering an overseas assignment need to deal before the secondment. Below we set out some of the essential points:

1. Ensure employment documentation is in order

Where an employee will be seconded to another organisation (the “host” organisation) during the assignment, but will remain employed by the “home” organisation for the duration of the assignment, the home organisation should enter into a letter of assignment with the employee. This will set out the changes to the employee’s terms and conditions of employment while he or she is undertaking the assignment. Another document that global employers should consider putting in place is an international assignments policy , which should set out the organisation’s approach to international assignments.

2. Ensure employee is aware of changes to terms and conditions

Often there will be many changes to the employee’s terms and conditions while he or she is undertaking an international assignment , for example changes to salary and benefits. Some employees assume that they will be entitled to certain benefits or they may misunderstand the implications of the assignment. For example, the employee might assume that the employer will pay his or her children’s school fees and for private health insurance. To ensure there are no nasty surprises, it is important for the employee to be clear about the changes to his or her contract of employment, and the changes should be set out in the letter of assignment .

3. Consider immigration requirements early on

Obtaining immigration permission for an employee to live and undertake an assignment overseas can be a long process, and the success of the application may depend on various factors. The organisation should consider obtaining expert assistance with the immigration application. Making preparations early will help to ensure that the organisation can deal with any obstacles that arise and that the assignment can start as planned. Organisations may also need to help the employee with obtaining immigration permission for his or her family where they will be accompanying the employee on the assignment.

4. Consider tax implications

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The tax and social security implications of an overseas assignment for the employer and employee may be complex. Employers should seek specialist advice on these issues, so that they are not surprised about the cost implications. They could also arrange for the employee to receive expert advice.

5. Ensure the employee is prepared

Undertaking an international assignment can be a great professional and personal experience for an employee. However, the success of an assignment is likely to depend on the extent to which the employee is prepared for what lies ahead. Helping the employee to prepare for the assignment , for example by providing the employee, and perhaps their family, with language and culture classes, can help to ensure that the employee knows what to expect and settles in to his or her new role more quickly.

Bar Huberman

Bar Huberman is a principal employment law editor at XpertHR, working on a number of resources including the good practice guides, line manager briefings and webinars. Before joining XpertHR in 2009, Bar was a solicitor at a firm in Brighton. She specialised in dispute resolution, including workplace disputes, and non-litigious employment law.

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I am so very pleased to see that Point 5 has made it onto the list. I am a cultural trainer and executive coach who delivers trainings to individuals, couples, groups and children who are moving abroad and/or being repatriated. The training is an integral part of the move. It no only delivers information about the country, city/town but informs client(s) what to expect when they arrive, assisting in the adjustment process. Happy home life, happy work life balance.

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50+ SAMPLE Assignment Agreements in PDF | MS Word

Assignment agreements | ms word, 50+ sample assignment agreements, assignment agreement: what is it, why do you need an assignment agreement, how to create an assignment agreement, what are the other names of an assignment agreement, what are some allowable examples of assignment agreements, what are some unenforceable assignments.

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Step 1: introduce the agreement and its parties, step 2: assign the tasks and responsibilities, step 3: be direct and clear, step 4: include a termination clause.

• A contract doesn’t allow the assignment.
• The assignment changed a lot from what was expected.
• There is a law or policy violation from the assignment.

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Patent Assignments in Employment Agreements – a Sometimes Overlooked, but Always Important Component

• November 16, 2021

By: Peter C. Lando and Thomas P. McNulty

With assistance from summer intern Tyler Gruttadauria

Businesses, of course, have a strong interest in owning intellectual property created by their employees. Intellectual property—patents, copyrights, and other confidential and proprietary information including trade secrets—is often the most valuable asset a business can own, so it is important to ensure that employee developments and inventions belong to the employer. In the United States, inventions presumptively belong to the inventor, and any transfer of ownership (“assignment”) must be in writing to be effective. Rather than requiring employees to sign assignment agreements for each patent application filing, employers sometimes rely on employment agreements and handbooks to establish ownership in intellectual property created by an employee. Employers often provide employment agreements with assignment clauses that are intended to give the employer rights in inventions made by the employee during the period of employment. These assignment clauses are often treated as mere boilerplate, yet the precise wording of these clauses can have major impacts on the effectiveness and limitations of any assignment.

Ensure that you have an Assignment and not a mere promise to assign

When drafting an agreement to have an employee assign future inventions, it is vital that the language used in an assignment clause states a present-tense, actual assignment. Phrases such as “hereby assign,” “agrees to grant and does hereby grant,” or that inventions “shall belong” to the employer and employee “hereby conveys, transfers and assigns” have been deemed by the courts to be effective to transfer ownership of a future invention without the need for any subsequent agreement. Ownership effectively transfers immediately, once the invention has been made. Assignment clauses that use future tense language, on the other hand, generally will require an additional agreement to result in a transfer of ownership of the invention, and any intellectual property (“IP”) covering the invention. Terms such as “will assign,” “agree to assign,” “will be assigned,” and the like, have been found by numerous courts to constitute nothing more than a promise or contract to assign an invention in the future, but not to serve as an actual assignment.

In addition to the wording used in the assignment clause, the language of any carve-outs should also be scrutinized. Agreements may contain a carve-out clause to exclude a new employee’s prior inventions from being assigned, or to prevent assignment of inventions unrelated to the employee’s work from being swept into the assignment provision. A broad, non-specific carve-out clause may prevent an employee agreement from automatically assigning inventions of that employee, even where the assignment clause includes the proper “hereby assign” type of language, because this leaves open the possibility that an invention is not subject to the assignment clause. This contrasting language may create an ambiguity in the employment agreement that subjects it to construction under state law, which in turn may allow for the employee to introduce extrinsic evidence, such as conversations that took place during employment negotiations, to defeat the automatic assignment. While patent assignment provisions are governed by Federal Circuit law, resolution of contractual ambiguities is governed by state law, which varies considerably regarding the admissibility of such extrinsic evidence.

Failure to obtain an automatic assignment can have negative consequences

An assignment clause that is deemed ineffective to automatically transfer ownership of an invention can create significant problems for an employer. In such circumstances, a business would not have standing to bring a patent infringement suit until it has taken the necessary steps to obtain a valid assignment. This may require the filing of a breach of contract claim against the employee to require fulfillment of the contractual obligations, including execution of assignment documents. In the interim, infringers could continue practicing the invention; and if the infringing activity has gone on long enough, the six-year statute of limitations may prohibit full recovery of damages. Further, if an inventor/employee has made only a promise to assign, and instead transfers ownership to a third party who lacks knowledge of the assignment obligation, that second transfer of ownership may well prevail, leaving the original employer with no exclusionary rights at all.

Ineffective assignment provisions can affect more than just litigation. Businesses and investors typically conduct IP due diligence when entering into transactions involving the investment in or sale of IP assets, company divisions or entire entities, and any weaknesses in assignment provisions may affect the perceived value of the IP assets and/or business being considered.

Do not count on the “Hired-to-Invent” doctrine to result in ownership of employee inventions

Some employers do not require employees to sign an agreement containing an assignment of inventions because they believe that they automatically own inventions that they paid someone to create. Under the “hired-to-invent” doctrine, this will only occasionally be correct. Employees or contractors hired (and paid) specifically to create a particular invention or to solve a particular problem may be deemed to have implicitly assigned their rights in the invention to the employer. This is a highly fact-based determination, however, and applies only to inventions created in response to the specific thing the employee was hired to do. A mere title of “researcher” or even “inventor” will not, standing alone, suffice to ensure ownership of inventions by the employer. Further, until a court has ruled one way or the other, an employer relying on this doctrine will not have any certainty in its rights to the invention. Should the court rule against the employer, it would lose the exclusionary rights it believed it possessed and may face an infringement lawsuit from the employee or anyone to whom the employee may have assigned the invention/patent rights.

Absent an effective assignment, an employer may obtain limited “shop rights” in inventions made using the employer’s time, materials, facilities or equipment. Shop rights take the form of an implied license to practice the invention, precluding the employee from obtaining damages or injunctive relief on a patented invention. Shop rights are limited, however, and do not allow the employer to prevent others from competing by practicing the invention. Further, shop rights cannot be transferred via license or assignment, effectively devaluing the IP assets and, perhaps, the company.

Other Considerations

In addition to having the proper “hereby assign” language, employment contracts should ensure that inventions , rather than just patents or patent applications, are subject to the assignment clause. Language stating that all inventions, improvements, discoveries, and the like, whether or not patentable or copyrightable, are subject to the assignment, ensures that information that could be protected through other regimes, such as trade secrets, automatically become the property of the employer.

Intellectual property has taken on an ever-increasing role in determining the value of a business. A company’s ability to develop and protect its intellectual property is a key factor in its future success. Given this, it is important that businesses recognize that assignment provisions of employment agreements are not mere boilerplate, but instead may be one of the most important legal provisions that ultimately can impact not only an employment arrangement, but the value of the business itself.

• Peter C. Lando
• Thomas P. McNulty

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Contract Assignment Agreement

Select the name of the state whose law will govern the interpretation of this contract and will be the location of any future disputes related to this contract. This is usually the state where at least one of the Parties resides or does business related to the contract. If this Agreement involves the transfer of land, this would be the state where the land is located.

CONTRACT ASSIGNMENT AGREEMENT

State of Alabama

This Assigment Agreement (the "Agreement) is entered into by and between ________ (the "Assignor"), having their principal address located at ________ , and ________ (the "Assignee"), having their principal address located at ________ , both of whom agree to be bound by this Agreement, in consideration of the mutual covenants herein contained and other good and valuable consideration, the sufficiency of which is hereby acknowledged, witnesseth:

WHEREAS , Assignor entered into a Contract, included as an attachment to this Agreement, with ________ (the "Obligor"), referred to hereinafter as "Contract with ________ ";

WHEREAS , the Contract with ________ has an original expiration date of ________ as may be extended as permitted therein;

WHEREAS , Assignor wishes to assign all of their rights and obligations under the Contract with ________ to Assignee; and

WHEREAS , the necessary verbal consent was obtained from the Obligor on ________ ;

NOW THEREFORE , Assignor and Assignee agree to the following:

I. Assignor and Assignee hereby agree that the Assignor shall assign all their rights, titles, and interests, and delegate all of their obligations, responsibilities, and duties, in ad to the Contract with ________ , to Assignee.

II. Assignee hereby accepts the assignment of all of Assignors obligations, responsibilities, and duties under the Contract and all of Assignors rights, titles, and interests in and to the Contract with ________ .

III. Notwithstanding the foregoing, Assignor agrees to defend and indemnify the Obligor from any and all claims,actions, judgments, liabilities, proceedings, and costs, including reasonable attorney's fees and other costs of defense and damages, resulting from Assignors performance prior to the assignment of the contract and resulting from Assignees performance after the assignment of the Contract with ________ , provided, however, that after the assignment of the Contract with ________ , the State shall first look to Assignee to satisfy all claims, actions, judgments, liabilities, proceedings, and costs, including reasonable attorneys fees and ot her costs of defense and damages resulting from Assignee's performance.

IV. Assignee agrees to indemnify the Obligor from any and all claims, actions, judgments, liabilities, proceedings, and costs, including reasonable attorney's fees, and other costs of defense and damages, resulting from Assignee's performance after the assignment of the Contract with ________ .

V. No modification of this Agreement shall be valid unless in writing and agreed upon by all relevant Parties.

VI. 52 252 28222 522 252888822 22 2588 825222222 88 5285 22 8285885, 8882258, 25 5222225825882 225 522 525822, 2522 252 2552828 52522 2552 8585 252888822 85588 82 522225 22 82 825582 525 252 522582525 22 252 825222222 85588 82 22225825 58 82 252 825582 252888822 8252 22825 82885525 82 252 825222222.

VII. This Agreement is governed by the laws of the State of Alabama and both Parties expressly consent to jurisdiction in such courts.

IN WITNESS WHEREOF, the Parties execute the Agreement as follows:

______________________________________________ ________

______________________________________________ Date

HOW TO CUSTOMIZE THE TEMPLATE

Answer the question, then click on "Next."

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• Assignment Abroad

Considerations when Assigning Employees to Work Abroad

There are a number of considerations for employers who wish to assign their employees to work abroad. These will include meeting the immigration requirements of the country of posting and any employment laws which are in place in that country. Often employers will develop a relocation policy or similar document to deal with all of the conditions and practices applicable to the posting.

It is usual for a number of issues to be agreed prior to the posting which will include:

1.  Remuneration  including any incentive payments, any additional benefits relating to relocation and the currency of the remuneration.

2.  The tax position  – the length of the posting may affect the employer’s tax status within the UK and this should be clarified if necessary.

3.  National insurance contributions and benefits  – the regulations in relation to this aspect of a posting are constantly changing and therefore both parties should ensure that the situation is clarified to ensure that any social security contributions to be made are paid in order that any state benefits can be preserved.

4.  The law applicable to the posting  should be clarified. The parties to a contract may choose which law will determine their respective rights and obligations. However, even if the parties agree that the law of the country outside the UK is to govern the contract a UK employee cannot be deprived of any UK statutory employment rights that may apply. Where employees carry out duties in more than one country, the place where the employee habitually carries out their work will be decided by the length of time the employee spends in each location and where they have worked the longest.

In relation to the enforceability of the employee’s UK statutory rights, it is generally necessary to look at the territorial jurisdiction from which the UK statutory employment right is derived to ascertain whether the employee can bring a claim to protect or enforce their rights within the Employment Tribunals in this country.

Whilst employees and employers are free to agree to enhance these conditions, they may not reduce or exclude them. Therefore the right of an employee not to be unfairly dismissed under UK employment law cannot be avoided by the parties agreeing that another country’s law will govern the employment contract.

Related Pages

• Secondments at Work
• Part-time Workers
• Fixed Term Contracts
• Breach of Contract

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Invention Assignment Agreements – How to Avoid Pitfalls

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How to Write an Employee Invention Assignment Agreement

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ContractsCounsel has assisted 1010 clients with employee contracts and maintains a network of 296 employment lawyers available daily. These lawyers collectively have 183 reviews to help you choose the best lawyer for your needs.

Writing an employee invention assignment agreement requires a lawyer to draft a document showing who owns what and the rights between an employer and employee. This contract helps in clarifying the terms of intellectual property rights as it relates to inventions, artwork, innovations, published content, and software code, among others that can be done by employees. This post will talk about how you can write an employee invention agreement and matters relating to the same.

Steps for Creating an Employee Invention Assignment Agreement

An employer should enter into an employee invention assignment agreement to safeguard its interests with respect to any inventions, creations, or discoveries made while performing duties for the company. These are steps toward writing a sound employee invention assignment agreement:

• Recognize Objective and Scope. Understanding this requires drafting the contract itself. The main purpose of this document is to describe to whom certain rights pertaining to their IP goes when they work with the firm.
• Include Parties’ Identification and Definition. The names of the two parties involved, employers and employees, must be added to these documents, together with their legal addresses and other relevant corporate information. Furthermore, define some important words used within this paper so that there would not be confusion about anything said later on.
• Highlight Intellectual Property Covered. Differentiate what kind of intellectual property is meant here in clear terms. It may include such things as designs, writings, and software products, among others as far as concerns, business concern is one part that ensures all potential kinds of intellectual property are covered.
• Establish Timing and Ownership. The period within which this contract runs needs defining. As a rule, it usually encompasses IP created by staff during their employment term at such a corporation. Determine if ownership immediately vests in the company upon creation or whether there exists a process through which it can be transferred thereto.
• Detail Reporting Requirements. Specify how workers should submit information about their patents or works to supervisors/managers, etcetera, instead of them being kept secret from each other’s eyes alone, ensuring all valuable IPs are made known. Thus, indicate the way and period one is expected to convey.
• Clarify Consideration and Compensation. Find out if there is any amount, reward, or other forms of value being provided to staff in return for such IP that they become the company’s property. Besides a lump sum payment as may be agreed upon under the agreement, it could also involve sharing some part of future profits that emanate from the use of those innovations.
• Introduce Confidentiality and Non-compete Clauses. Some of the things you should add to this paper are clauses dealing with non-disclosure agreements and non-competition after termination. These protect trade secrets from competitors even if an employee leaves one company for another.
• State Jurisdiction and Dispute Resolution . You need to clearly mention where this contract falls in terms of jurisdiction, plus outline how conflicts between parties should be solved once they arise. Methods like mediation, arbitration, or litigation may be used. This helps in avoiding legal complications later on by setting what would happen during disputes within its text.
• Obtain Legal Review . It is important to consider engaging professional legal minds who will confirm their compliance with governing legislation. This can point out places that have been designed ambiguously or might contain loopholes leading to disagreements afterward.
• Get Signatures. When the employee invention assignment agreement has been written and reviewed, it should be executed by both parties. Putting signatures on the agreement is a way of demonstrating comprehension and consent to the terms that have been summarized in the invention agreement. It is also good to have signed copies retained for future reference.

Importance of Writing an Employee Invention Assignment Agreement

Intellectual property (IP) is normally considered the basis for success in online businesses due to their rapidly changing nature. As organizations continue to search for ways of creating new goods, services, and technologies, there has been a growing importance of employees’ input towards these developments. However, ownership and protection of intellectual property rights developed by employees during employment can become intricate. This is where firms exploit employee invention assignment agreements. Here are some reasons why drafting an employee invention assignment agreement is important:

• Protecting Intellectual Property: Employees may disagree with employers over ownership claims if they do not sign EIAAs, resulting in conflicts between them. An EIAA clearly defines who owns what and, therefore, avoids lawsuits.
• Facilitating Innovation: An EIAA encourages workers to provide creative ideas without fear of being discredited or controlled by setting out who possesses such ideas and how they are compensated for through it. Thus fostering an environment conducive to nurturing innovation.
• Enhancing Business Viability: Intellectual property is often at the core of corporate competitiveness. Therefore, this ensures that it does not lose its capabilities in terms of licensing or otherwise using its IP assets while keeping abreast of time.
• Avoiding Litigation: Ownership ambiguities can lead to expensive disputes between employees and companies; however, well-written EIAs eliminate the need for litigation, thus saving resources spent, time used as well and reputational harm suffered.
• Encouraging Innovation: However, while these contracts may favor organizations with respect to ownership rights in inventions, they occasionally contain provisions relating to providing reasonable compensation or recognition to inventors who make substantial contributions towards inventions. This strikes a balance for employees who may feel that their own inventions will be recognized or rewarded even though they are owned by the company.
• Attracting Investors and Partners: Companies with robust IP strategies, including sound EIAAs, are more likely to secure investors and potential partners. It is an indication of the organization’s commitment to protecting its assets.
• Complying with Legal Requirements: The lack of an EIA in some jurisdictions could give employees stronger claims on their intellectual property. Having a comprehensive EIAA in place helps companies to ensure compliance with local laws and regulations.

Key Terms for Writing an Employee Invention Assignment Agreement

• Intellectual Property (IP): Ideas, designs, inventions, and other works which are protected by law.
• Invention Disclosure: A formal report made by an employee specifying a new invention or idea to the employer.
• Prior Inventions: Innovations made by staff before commencing jobs, frequently not covered by the agreement.
• Work for Hire : Legal doctrine implying that the employer has automatic ownership over creations produced during work.
• Assignment of Rights: Employee’s conveyance of intellectual property rights to the employer as provided in the document.
• Exclusivity: The term restricting workers from transferring patents related to other organizations under contract.
• Inventorship: Identification of persons who contributed to the creation of something important for obtaining patents.
• Royalties: The amount paid to employees for inventions generating revenues for the company.
• Derivative Works: Intellectual property developed from existing creations, subject to the terms of the agreement.
• Termination Clause : It spells out what becomes of inventions in case of cessation of employment, including how rights will be passed on.
• Severability: Clause that ensures that if one part of the agreement is found to be invalid, others are still enforceable.
• Waiver : Often, written consent is required for one party to waive any right it has.
• Arbitration: A method of settling disputes outside a court, which is usually stated as this contract’s preferred approach.
• Verbosity: The article provides essential knowledge on drafting an employee invention assignment agreement.

Final Thoughts on How to Write an Employee Invention Assignment Agreement

In today’s knowledge-driven and competitive economy, where innovation is vital for success, organizations must proactively manage their intellectual property assets. An employee invention assignment agreement serves as a foundational document that outlines ownership, protects trade secrets, and fosters an atmosphere of inventiveness. What’s more, businesses can enable themselves to fully exploit their employees’ ingenuity and zeal while protecting their rights by creating a framework for ownership and associated rights relating to intellectual property.

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ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

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I provide comprehensive legal and business consulting services to entrepreneurs, startups and small businesses. My practice focuses on start-up foundations, business growth through contractual relationships and ventures, and business purchase and sales. Attorney with a demonstrated history of working in the corporate law industry and commercial litigation. Member of the Bar for the State of New York and United States Federal Courts for the Southern and Eastern Districts of New York, Southern and eastern District Bankruptcy Courts and the Second Circuit Court of Appeals. Skilled in business law, federal court commercial litigation, corporate governance and debt restructuring.

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Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

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Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.

I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

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