Basic Service Contract

Assignment of Second Week

Basic Service Contract
BUS 540 BUSINESS LAW FOR MANAGERS
Bishnu Dhamala
12th September, 2014

Basic Service Contract

Generally, contract can be defined as an agreement with specific terms between two or
more persons or entities in which there is a promise to do something in return for valuable
benefit known as consideration. Since the law of contracts is at the heart of the most business
dealing, it is one of the three or four most significant areas of legal concern and can involve
variations on circumstances and complexities. And here, we can define the basic service contract
as an agreement between the employer and employee.
As we know, consideration is an essential element for the formation of a contract. As it may
consider of promise to perform a desired act to refrain from doing and act which is legally
accepted. It can be defined as the agreement by which one party makes a promise in exchange
for the others performance; the performance is consideration for the promise.
Consideration should be able to include the value that can be objectively determined. For
example, promise of love and affection is not enforceable because of the subjective nature of
promise. In order to meet consideration's requirements, a contract must fulfill three elements.
They are:
There must be a bargain regarding terms of an exchange
Second, there must be a mutual exchange, In other words, both parties must get
something out of the contract
Third, the exchange must be something of value

Basic Service Contract

When we go deeply into the consideration, traditionally, courts have distinguished

between unilateral and bilateral contract by determining whether one or both parties provided
consideration and at what point they provided the consideration. Under this, bilateral contracts
were said to blind both parties the minute the parties exchanged promises, as each promise was
deemed sufficient consideration in itself.

Here, we can be review a basic service contract. For that let us see a basic service
contract of the Damodar Bhattari employee of the Nepal Bangladesh Bank Ltd. Some of the
important points of service contract are as follows:

Basic Service Contract

Nepal Bangladesh Bank Ltd.

Kamaladi, Kathmandu
Nepal
Post Box No. 9062
Tel: 4233780/81/82/83/84/85
Fax: 977-1-4233776
URL: www.nbbl.com.np
Email: nbblho@nbbl.com.np
SWIFT: NPBBNPKA

Human Resource Department

September 12, 2014

NBB/HR/071/5533

Mr. Damodar Bhattarai

Newbaneshwor-34
Kathmandu, Nepal
Dear,

Mr. Bhattrai,

With reference to the recruitment process, subsequent to written examination and the
interview with you, we are pleased to inform you that you are selected for the position in
the Bank as Management Trainee on probation.

Basic Service Contract

As per the human resource policy of the company, we set out below the terms of this
offer.

Your employment with the bank will commence no later than October 01, 2014.

Your total salary and allowances will be NPR 25,000(Nepalese Rupees Twenty five
Thousand Only) per month. This amount is consisted of :

Basic Salary: 17,000.00

Allowances: 8,000.00

You will be offered a permanent position after a succession probation period of one year.

You will agree to give your whole time services to the finance and your hours of work
will be as mentioned in the Employees Bylaws of the bank.

As per the requirement of the bank, bank has reserves the right to transfer any place in
the Kathmandu as well as the outside the Kathmandu valley.

You will be entitled to the holiday as approved by the bank.

You will be required to sign an oath of secrecy relating to the Banks business and its
customers upon joining the bank.

You shall submit a medical certificate from doctor as recommended by the bank at your
cost.

Yours Sincerely

Rahul Sharma

Human Resource Manager

Basic Service Contract

From the above, we can see the example of the service contract where consideration is
essentially for the contract to be enforceable. Normally, by reviewing, it would take a
number of forms, benefit as well as the doing of an act.

Here in the service contract if Damodar Bhattarai signs the above offer then it implies
that he has accepted the offer of the bank. Now, consideration is Rs. 25,000.00 per month
for the Mr. Bhattarai for working in the bank. As we analyzed the basic service contract,
it should include the following thing:
Scope of the work
Payment for the work
Procedure and Performance
Turnaround time
Service provider and its employee
Service providers Liability
An exclusive Contract
Indemnity
Change in the Constitution
Return of document, paper, amounts, properties, and letters of the service receiver
on the termination.

Basic Service Contract

According the website of Nepal Rastra bank, definition of the employee can be defined as
an individual presently employed in any post of the bank. Here, employment protection
legislation includes all types of employment protection measures, whether grounded primarily in
legislation, court ruling, and collectively bargained condition of employment or customary
practice. The term is common among circles of economists. Employment protection refers both
to regulation concerning hiring and firing. Generally, in the employee by laws usually include
following points:
Name of the organization.
Objectives of the organization.
Function, duties to be carried out by employees according to the department.
Salary increment procedure.
Employment policies, procedures, rules and regulations.
The various positional titles.
Salary, compensation policies.
Various vacations per annum.
Various benefits.
Probation period.
Performance review policy.
Termination procedures

Basic Service Contract

For the working in the abroad, employment contract is different in some extent as compared in
above.

Specimen of Employment Contract Letter

(For the employment contract, the standard contract of company may be used, but there should
be following main conditions)
This contract of employment is executed and entered into by and between:
-

Employer: ........................................

(Name, Address, Tel. No., Fax No. and Email address of the Employer)
-

Employee: Mr.. holder of passport No .

Both of whom voluntarily bind themselves to the following term and conditions; Basic Term of
Contract:
1. Employee Job Title or Position:
2. Basic Monthly Salary: .
3. Duration of Contract: The duration of the contract should not be less than two years, but in
special case where salary is comparatively higher than in normal cases, lesser duration may be
considered.
4. Traveling Expenses: The economy class air ticket will be provided by the employer for both
ways.
5. Accommodation: The employer will provide suitably furnished accommodation at free of cost.
In case of working in a community where lodging can be rented and employer wishes to pay
cash in lieu of rent, it shall be paid at a rate suitable to the locality.
6. Food (If provided): The employer will provide three meals per day to the employee free of

Basic Service Contract

charge or 25% of the basic salary in lieu thereof.

7. Working Days and Working Hours: Normal working days shall be six days per week and one
day paid holiday per week and working hour shall be 8 hours per day, 48 hours per week.
8. Overtime: In case the employer requires the worker to work overtime or on holidays, the
employer shall pay for overtime or holiday work at 1.5 times and 2 times of basic salary rate.
9. Leave Benefit: The employer shall clearly state the weekly holidays, annual holidays and
annual vacation specifying number of days, payment or wages or other compensation, which
shall be according to the laws of the country of the employment.
10. Medical Treatment: The employer shall provide free medical services, including medicines.
11. Insurance: The employer shall provide necessary insurance against death or injury according
to the laws of the country of employment.
12. Renewal of Contract: The contract is renewable with mutual agreement of both the employer
and employee.
13. Other Terms and Conditions: Other terms and conditions favorable of the employee not
covered herein and which the laws of country of employment provide, shall apply and form part
of this contract.

THE FIRST PARTY

THE SECOND PARTY

Authorized Signature & Company Stamp

_______________________

_______________________

Signature of Employer, Date

Signature of Employer, Date

Basic Service Contract

REFERENCES
businessdictionary.com/definition/service-contract.html. (n.d.). Retrieved from
www.businessdictionary.com/definition/service-contract.html:
http://dictionary.reference.com
http://www.nrb.org.np/
http://www.nbbl.com.np/
http://www.nealconepal.com/index.php?pageID=18
http://www.potalaoverseas.com/emp.htm

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