Is Your Employment Contract Enforceable? 4 Contract Defects to Know

Termination clauses in employment contracts are often assumed to be airtight—but in many cases, they aren’t. In fact, several well-established legal principles can make these clauses unenforceable, leaving employees entitled to significantly more compensation than they expected.

In this week’s series of YouTube Shorts, I broke down four common contract defects and why a termination clause—or even the whole contract—might not hold up in court.

1️⃣ The Contract Violates Employment Standards

The first and most straightforward reason a termination clause can be struck down: it provides less than what’s required under employment standards legislation.

When that happens, the clause is void—and you may be entitled to common law reasonable notice, which is calculated based on:

• Your age

• Your length of service

• The nature of your role

• How difficult it would be to find similar employment

In many cases, this can mean up to 24 months’ pay or more.

2️⃣ The Contract Is Unconscionable

A contract can also be unenforceable if it’s deemed unconscionable—a legal term that applies when one party takes advantage of the other’s vulnerability in a way that’s deeply unfair.

One example: an employer gives you a new contract with a more restrictive termination clause and doesn’t tell you that they’re planning to let you go shortly after. If they withhold that information while securing your agreement, a court could find the contract unenforceable.

3️⃣ There Was No Consideration

For a contract—or any update to one—to be enforceable, there must be consideration. That means both parties must receive something of value in exchange.

In employment law, if your employer introduces new restrictive terms (like non-competes, changes to termination rights, or confidentiality obligations), they must give you something in return. That could be:

• A promotion

• A signing bonus

• A raise

• Additional vacation time

If there’s no new benefit? The added terms might not stick.

4️⃣ The Substratum Doctrine Applies

Even if the contract was valid when you signed it, it might no longer apply if your role has changed significantly. This is where the substratum doctrine comes in.

Courts may find that your employment has evolved so much that the original contract no longer governs your relationship. Relevant changes include:

• Job title

• Compensation

• Responsibilities

• Work location

If so, and your termination clause no longer applies, you may again be entitled to common law notice.

⚠️ However: if your contract specifically states that the termination clause survives any changes to your role, it will usually override a substratum argument.

Whether you’re reviewing a new offer, renegotiating your contract, or navigating a termination, it’s worth asking: Is this contract actually enforceable?

📺 You can watch the full video series here: youtube.com/@clausework/shorts

💬 Have a question about your employment contract? Wondering whether your termination clause would hold up? Get in touch or drop a comment on one of my videos—I often cover real questions in future posts.