Employment Financial Liability Contract

Often a property accountability contract is attached to the labor contract.  It insures the company against possible damage caused by certain action or inaction of the employee. Such contract strengthens employee’s responsibility for the property entrusted to him and guarantees obtaining compensation from the default party to the employer.

Not all managers know how to correctly formulate the above document.  Difficulties are caused by its numerous types and procedural nuances.  To conclude such contract with an employee, he\she should meet certain criteria:  employment type should be indicated in the legislative list, and activity is related to the equipment, materials and supplies.

In addition, the legal requirement to formalize this kind of relationship is not binding for the employer, therefore some of them neglect this formality.  But as practice shows, in case of any dispute this contract helps avoid losses.  From the viewpoint of legal language, in the absence of such contract even a well-founded default of the employee allows company to recover damages not more than one average monthly salary.

Our lawyers will protect you from these troubles and help you correctly formulate property accountability contract based on company activities and the list of property that the employee(s) deals with.

Договір про матеріальну відповідальність співробітника

Types of property accountability contracts

Material liability is classified into two types:

  • Limited;
  • Full.

The first type applies in cases when there is no accountability contract as such.  The employer himself recovers damage from the employee in the amount not exceeding the average monthly salary.  If the amount of damage exceeds this value, it can only be recovered through court action.

The second type implies recovery of the entire amount of damage by the employee.  Liability arises if employee in his work deals with the storage, transfer or use of materials and supplies.  In this case, contract is mandatory:  it contains all terms and conditions of property use by this person and the degree of responsibility for it.

Full material liability is divided into:


Assumes the security given by an individual employee.  The amount of property for which the employee is responsible is known, the employee has all the conditions for exercising control over the materials and supplies.  The list of job positions and works requiring this type of contract is contained in the law. For example, it can be a cashier, storekeeper or driver.


In this case, the whole amount of property is managed by several persons.  They all share liability for the property, therefore it is difficult to distinguish everyone’s default in case of possible damage.  The contract shall be concluded with a certain number of persons.  An example of collective liability may be construction team or sales team.

Stages of contract conclusion

It is better to conclude a property accountability contract at the same time with the employee’s nomination to the position or commencement of work related to this liability.

Here, personal liability is incurred only when a full liability contract has been concluded with the employee.  A person who has reached the age of eighteen and directly deals with this property is eligible to sign such contract with the employer.  The same applies to collective liability.

It is better to talk about all terms and conditions of liability at the stage of signing labor contract. This provision should be written in the document so that during formulation of accountability contract the employee has no reason to refuse from its signature.

In case of collective liability, the manager should:

  • prepare an appropriate order;
  • disseminate it to all relevant employees;
  • conclude accountability agreements with employees.

Contract terms

Property accountability contract can be concluded both together with the labor contract, and separately from it.  In the second case, the best moment for its signature is start of employee’s work with materials and commodities.  All materials and commodities that an employee has to deal with, are transferred to him according to the checklist and are subject to regular inventory.

The contract is signed by both parties, one copy for each.  Date of document signature is start date for counting the employee’s liability.

In addition to the conclusion of the contract, all property accountable persons should be familiarized with the regulatory documents relating to the order of property storage and use.

The material conditions of the property accountability contract include:

  1. Employee is at least eighteen years old.
  2. Labor relationship with the employee is formalized.
  3. Work of an employee is directly related to materials and commodities.
  4. Job position of an employee is included in the list of jobs or works requiring conclusion of such contract.

Our experts know all the subtleties of drafting property accountability contract and will avoid possible mistakes in drafting it.  By contacting us, you will be able to avoid:

  • entering into contract with an employee who is not eligible for that;
  • signing individual and collective responsibility contract with the same employee at the same time;
  • signing document without entrusting the employee with the accountable property.

Grounds for the contract termination

As a rule, the contract is terminated from the moment of termination of the labor contract.  Also, when concluding a collective liability agreement with an employee, an individual liability contract, if any, shall be canceled. In this case, a termination agreement is signed, which states the grounds for termination. Based on this document the employee is exempted of all former obligations.

Lawyers of Financial Chain Corporation will make your business safe!

Only an experienced lawyer can protect your property.  We offer a full package of services for doing business, and the development of property accountability contract is included in it.  Our staff will consider each case in detail and provide the necessary consultation. We guarantee:

On time

At any moment our lawyers will give you a qualified answer to any question relating contract conclusion.


Our employees track the changes in the legislation, so you can be sure in validity and relevance of the information provided.

Advantageous cooperation

We save your money:  outsourcing of our legal experts is cheaper than maintaining your own legal or economic department.


We are focused on long-term cooperation, therefore we take our work very seriously.

We perfectly know what our client needs, so we offer only proven and relevant solutions.  Just one call, and you receive a legally correct property accountability contract. Just do your business, and leave formalities to us!

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