Contractors' Questions: Is a vow to renew binding?

Contractor's Question: I was offered a contract renewal by the agent; I have e-mail evidence. And they kept saying it was awaiting sign-off/in finance etc.

The client then decided not to renew me a week before my contract was due to end. So, is a verbal contract extension binding ?

Expert's Answer: It's always difficult to advise on the basis of an outline only of the facts.

First, was there in fact an unconditional offer made? Second, was it in fact accepted, and was that acceptance communicated back to the offering party? If so, and if the key terms of the agreement are clear, then yes it can be binding; but bear in mind that even then, a contract can be terminated if its terms so provide.

If this was an extension then the terms are likely to be the same as before, subject only to any changes that were in fact agreed (such as the new dates); so any termination provisions in the original contract will probably still apply.

It seems that, given that you say 'they kept saying it was awaiting sign-off/in finance etc', the offer may well not have been unconditional. It would be necessary to look at the email trail to begin to form a view on this. Frankly, I'd not hold your breath. But if in doubt, get advice.

Answer provided by Roger Sinclair, a legal consultant with
Egos, an IT contractor advisory.


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