Contractors’ Questions: Is my acceptance on email binding?

Contractor’s Question: A friend working as a contractor was able to get his current contract extended but in the meantime he received another contracting offer, which he has agreed to take by confirming it on email. He has not yet signed the new contract document.

Also the contractual document says that the "contractor is in agreement of the contract from the start of his assignment", which is still a month away.

When he conveyed the news to the agency, they asked him to pay a full month’s commission fees. The agency has also threatened him that his acceptance of offer by email will be valid in court. Legally, how could the contractor get out of the given situation? 

Expert’s answer: Emails can be taken as evidence of acceptance of a contract. This depends on what was said in the email. If the contractor stated they would undertake the contract in unambiguous terms, they may have difficulty in claiming there is no contract.

That said, the contractor should also look at the full terms of the document. These may require signature to be accepted and if so the email is irrelevant. The statement, the “contractor is in agreement of the contract from the start of his assignment” does indicate that the contractor must start to have a binding contract - but this is not definitive. There are likely to be other terms dealing with when the terms come into force: when they are accepted, etc, which would need to be looked at. If not, the wording is ambiguous and is likely to be construed against the agency as it is their wording. This may give grounds to claim there is no obligation to take the new contract as they have not started.

Even if the contract has been accepted, the contractor should look at the termination provisions in the document. If the contractor can pull out on no notice, there is no value to any claim for breach of contract as nothing would stop the contractor from doing so on the first day.

Also a statement that the contractor owes one month’s commission fees seems simplistic. Has the agency been able to place another contractor in the role? If so they have no loss and no claim.  There is a month before the contract starts so this may be possible and they are obliged to try to mitigate their loss. If they are merely claiming a fixed fee this would likely to be a penalty and unenforceable as loss should be measured by loss, not a straight fee. I assume however that the one month’s fees refer to a one-month notice period to cancel the contract but, again, if so the agency should try to find a replacement within that month to limit its losses.

I suggest challenging acceptance under the terms of the document, if the contractor can. If not, the contractor should attack the overly simplistic approach to the agency’s loss.

There are also the practical considerations of whether it is commercial for the agency to pursue a claim for one month’s commission fees. If not, they may not pursue matters. Lastly, if the contractor is undertaking the extended contract through the same agency, the agency is not being very self-serving by demanding the contractor breach that other contract, upsetting the existing client. If this is the case, it may be worth pointing this out to the agency before they pursue things further.

The expert was David Buckle, consultant employment solicitor at Cubism Law.

Wednesday 14th September 2011