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What Voids a Medical Employment Contract?

April 14, 2022

What Voids a Medical Employment Contract?

As clearly defined by Investopedia, a medical employment contract is void if “effectively illegitimate and unenforceable.” Put another way, a void medical employment agreement is one that has a fundamental flaw that renders it invalid. Most often, this means it has illegal terms or it was poorly drafted to the point of being illegitimate. In this article, our medical employment contract review lawyer explains the key things to know about void medical employment contracts. 

Enforceability of Medical Employment Contract: State Federal Law Matters

For the most part, contracts are enforced at the state level. To be valid, an employment contract for a medical professional must be in full compliance with state law. While there are many similarities in the medical employment contracts from state-to-state, there are also some important differences. A notable example is non-compete agreements. Non-competes can void a contract in some states. 

For instance, California law (BPC § 16600) generally holds that a contract that restricts an employee “from engaging in a lawful profession, trade, or business of any kind is to that extent void.” Non-compete agreements are disallowed in medical employment contracts in other states as well, including Massachusetts, Rhode Island, and Delaware. 

There are also some federal regulations that can affect a medical employment contract. Doctors and medical providers are required to comply with these regulations (Physician Self-Referral law (Stark Law)). Contract terms that violate this law or other federal regulations could potentially render an agreement null and void. 

Medical Employment Agreements Must be Well Drafted (Errors May Void a Contract)

In some circumstances, a medical employment agreement (or other contract) could be rendered void by a fundamentally structured error. As an example, imagine that the parties—a medical provider and a physician—make a major mutual mistake when negotiating and drafting a contract. A technical error in the drafting of the agreement could potentially render the entire contract void. For this reason, it is imperative that all medical employment contracts are drafted and reviewed by a lawyer with specialized skills and experience. 

A Breach of Contract May Make an Agreement Voidable 

Finally, it is worth mentioning that a breach of contract could render a medical employment agreement voidable. Notably, there is a legal difference between the term ‘void’ and ‘voidable’ in the context of contract law. A void contract is essentially an illegal contract. It is a contract that was never actually valid, even dating back to the point of formation. A voidable contract, on the other hand, is one that was legally valid, but that has not been rendered invalid due to the conduct of one or more parties. 

Call Our Medical Employment Agreement Attorney Today

At Chelle Law, our medical employment agreement lawyers provide personalized, solutions-driven guidance and support to our clients. If you have any specific questions about what voids a medical employment contract, we can help. Reach out to us by phone or connect with us online for a strictly private consultation. Our law firm offers medical employment contract review services in any state. 

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