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Offer letter states I need to pay back the entire stipend if I leave in between
1 week ago
I am an intern at a company and the offer letter states that I need to pay back the entire amount I have received as stipend if I leave the company during this internship period. But the money is spent as I am staying in a different city. What can I do?
A.Dear Client,
As an intern or probationer, you are bound by the terms stated in your appointment or offer letter. While employers can pursue legal action for breach of contract, this can be challenged under Section 27 of the Indian Contract Act, 1872, which prohibits agreements restraining trade or profession. Employees have the right to resign, even if they've accepted the terms outlined in their offer letter. However, if an employer can prove an employee intends to disclose trade secrets by joining a competitor, the court may issue an injunction. Sections 73 and 74 of the Contract Act cover damages, with compensation only awarded for actual losses. Currently, if there's no cause of action from the employer's side, there's nothing to address. Should legal action be initiated against you, seek advice from a lawyer upon receiving any legal or court notices.
As an intern or probationer, you are bound by the terms stated in your appointment or offer letter. While employers can pursue legal action for breach of contract, this can be challenged under Section 27 of the Indian Contract Act, 1872, which prohibits agreements restraining trade or profession. Employees have the right to resign, even if they've accepted the terms outlined in their offer letter. However, if an employer can prove an employee intends to disclose trade secrets by joining a competitor, the court may issue an injunction. Sections 73 and 74 of the Contract Act cover damages, with compensation only awarded for actual losses. Currently, if there's no cause of action from the employer's side, there's nothing to address. Should legal action be initiated against you, seek advice from a lawyer upon receiving any legal or court notices.
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A.Dear sir,
you have to serve the company and should not leave the company as per the terms of offer letter. Normally such condition will be there but corporates never go to court to recover such small amount.
you have to serve the company and should not leave the company as per the terms of offer letter. Normally such condition will be there but corporates never go to court to recover such small amount.
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A.Dear Client,
Even if you are an intern or probationer you are governed by the terms and conditions of your appointment/offer letter. For a breach of the terms of a contract, an employer can take legal action against the employee claiming damages arising out of the breach of said contract. But the action of the employer can be challenged by invoking Section 27 of the Indian Contract Act, 1872 which prohibits any agreement in restraint of trade and profession. The law states that an agreement or contract will be illegal only if it restrains someone from exercising a lawful profession/ trade/ business. As per the mandate of Section 27, any terms and conditions of an agreement that directly or indirectly compels the employee to serve the employer or puts a restriction on them joining the competitor or other employer is not valid. The employee has the right to resign from the employment even if he has accepted the terms and conditions of his offer letter. In the case where the employer can prove that the employee is joining the competitor to disclose the trade secret then on his appeal, the court may issue an injunction order restricting the employee from joining the competitor. Further, Section 73 of the Contract Act, 1872 makes provision for unliquidated damages. Section 74 of the Act deals with liquidated damages and no compensation is attracted for mere breach of contract u/s.73. or 74 of the Act unless such breach resulted in an actual loss or damage to the opposite party employer. So, at the moment, in the absence of any cause of action from the employer, you have nothing to do in the matter. Let them take legal action for breach of contract against you and on receipt of any legal notice or court notice, contact an Advocate for necessary steps. Feel free to contact our legal team to avail of our expert service to navigate the issue in the right way.
Even if you are an intern or probationer you are governed by the terms and conditions of your appointment/offer letter. For a breach of the terms of a contract, an employer can take legal action against the employee claiming damages arising out of the breach of said contract. But the action of the employer can be challenged by invoking Section 27 of the Indian Contract Act, 1872 which prohibits any agreement in restraint of trade and profession. The law states that an agreement or contract will be illegal only if it restrains someone from exercising a lawful profession/ trade/ business. As per the mandate of Section 27, any terms and conditions of an agreement that directly or indirectly compels the employee to serve the employer or puts a restriction on them joining the competitor or other employer is not valid. The employee has the right to resign from the employment even if he has accepted the terms and conditions of his offer letter. In the case where the employer can prove that the employee is joining the competitor to disclose the trade secret then on his appeal, the court may issue an injunction order restricting the employee from joining the competitor. Further, Section 73 of the Contract Act, 1872 makes provision for unliquidated damages. Section 74 of the Act deals with liquidated damages and no compensation is attracted for mere breach of contract u/s.73. or 74 of the Act unless such breach resulted in an actual loss or damage to the opposite party employer. So, at the moment, in the absence of any cause of action from the employer, you have nothing to do in the matter. Let them take legal action for breach of contract against you and on receipt of any legal notice or court notice, contact an Advocate for necessary steps. Feel free to contact our legal team to avail of our expert service to navigate the issue in the right way.
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