Long-Term Care

Tip of the month: Comprehending contractual law

The Center for Post Acute Excellence Update, July 5, 2010

Contracts and contractual law are important for long-term care administrators to understand. A contract is a legally enforceable promise between individuals. Contracts can be expressed or implied in nature. With the expressed contract there is an expressed understanding that the parties have agreed to, and although expressed contracts are often written, they can be verbal. Conversely, an implied contract is often inferred through conduct or actions that have transpired and are not necessarily stated. Contracts have some important features, including:

  • An offer – a specific promise to perform, as well as a specific demand for some duty if the offer is accepted.
  • Acceptance – occurs when one party agrees to the offer made by the other party.
  • Consideration – the essence of the contract. Consideration allows each party to understand the specificity of the agreement and the duties they promise to perform.

Contracts are typically binding agreements. Some are fairly straightforward, and often an annual continuation of services with few, if any, changes exist in the new agreement. Other contracts may be complex and should be examined by legal counsel. Remember that the administrator is typically the agent who is authorized to enter into contracts, and therefore little defense can be given to an administrator who did not understand or lacked the capacity to enter into such an agreement because he or she failed to use legal counsel.

This is an excerpt from HCPro’s book, The Long-Term Care Administrator’s Field Guide, by Brian Garavaglia, PhD.

Most Popular