Special Forms

There are several special types of contracts a paralegal should be aware of, such as negotiable instruments. Negotiable instruments are contracts between two or three parties. A check is an example of a negotiable instrument. When an employee receives a paycheck, the employer is agreeing to pay a certain amount of money for work that has been performed during the work period. The employee typically cashes the check and accepts payment. An individual who purchases a certificate of deposit agrees to keep his or her money in the financial institution for a period of time, and the financial institution agrees that at the end of the time, it will pay him or her a certain amount of interest for the use of that money. Interest may be added at different times throughout the deposit period rather than being added all at once on the date the certificate matures. It is also important for a paralegal to be knowledgeable about agency contracts.

A contract of agency is formed when the principal and the agent agree that the principal will direct the agent and the agent will act on behalf of the principal. Agents may make contracts for and on behalf of the principal. The principal will be liable for the contracts the agent enters into, with a few exceptions. A principal may reaffirm an unauthorized contract and may indemnify an agent who becomes financially responsible as the result of any such contracts. Labor contracts are contracts between a group of workers and their employer.

This resource provides instruction for users to:

• Describe negotiable instruments
• Explain actions that can be taken when using negotiable instruments
• Describe agency contracts
  
• Describe labor contracts
• Describe the effect of bankruptcy on collective bargaining agreements