Effect on Limited Company Liability Insurance without a signed contract

**northernladuk** · 2 May 2012, 13:46

To be honest you have a lot more to worry about working without a contract before you get in to all that. It is just plain stupid to do that and is opening you up to not getting paid and being binned off with 5 mins notice as you have no agreed notice period or anything.

There is a verbal and/or an implied contract between the two of you because you are there so the legalities I don't think are a problem. Not getting paid is.

**AussieDigger** · 2 May 2012, 13:47

Originally posted by northernladuk View Post

To be honest you have a lot more to worry about working without a contract before you get in to all that. It is just plain stupid to do that and is opening you up to not getting paid and being binned off with 5 mins notice as you have no agreed notice period or anything.

There is a verbal and/or an implied contract between the two of you because you are there so the legalities I don't think are a problem. Not getting paid is.

There was an initial contract to start with, but no renewed contract documents. Just ongoing work and billings....more than a year later...wondering if this is an IR35 issue ?

**northernladuk** · 2 May 2012, 13:52

Originally posted by AussieDigger View Post

There was an initial contract to start with, but no renewed contract documents. Just ongoing work and billings....more than a year later...wondering if this is an IR35 issue ?

Damn right it is. You have no deliverables to meet so are ineffect just an accepted member of the team i.e. hidden permie. You have no subsitution rights, no MOO nothing. You could try argue implied contract but that will be very costly.

But again.... this is the very last of your worries. When the agent witholds your money what are you going to hold him against when you want to take it further? You don't have a leg to stand on.

**geoff from contracta IOM** · 2 May 2012, 13:58

Surely in regard to IR35 if you do not have a contract both parties are essentially free to do as they please ? In normal business to business transactions for non contracting companies IR35 is never an issue as there are no implied work terms that you get when you sign a contract. The company will provide you a service as long as they feel like it , they get paid and until you tell them to bugger off. That to my mind is a true business to business arrangement. Never mind MOO and substitution clauses this is the actual reality of the arrangement.

In terms of getting paid , if a company carries out work for another company and issues an invoice upon completion of the work you have no more or less hope of getting paid than with a contract in place, if anything more hope as a judge will simply look at the relationship and not all the get out clauses in a contract.

To form a binding contract - offer ( I will come to do some work ) , acceptance ( turn up to work and they don't throw you out) and consideration ( payment )

The last does not have to happen just the first two to bring a claim.

**AussieDigger** · 2 May 2012, 14:05

Originally posted by geoff from contracta IOM View Post

Surely in regard to IR35 if you do not have a contract both parties are essentially free to do as they please ? In normal business to business transactions for non contracting companies IR35 is never an issue as there are no implied work terms that you get when you sign a contract. The company will provide you a service as long as they feel like it , they get paid and until you tell them to bugger off. That to my mind is a true business to business arrangement. Never mind MOO and substitution clauses this is the actual reality of the arrangement.

So what would the insurance company's view be on this ? Would your insurance be valid if no contract was in place ? Would it not be a term and condition of the insurance policy that a valid and legal contract was in place defining the work to be done, etc etc ?

**northernladuk** · 2 May 2012, 14:09

Originally posted by geoff from contracta IOM View Post

Surely in regard to IR35 if you do not have a contract both parties are essentially free to do as they please ? In normal business to business transactions for non contracting companies IR35 is never an issue as there are no implied work terms that you get when you sign a contract. The company will provide you a service as long as they feel like it , they get paid and until you tell them to bugger off. That to my mind is a true business to business arrangement. Never mind MOO and substitution clauses this is the actual reality of the arrangement.

Yes but the client doing what they want with you can also be called direction and control. Working without a contract is just silly on many levels. You could arge all the points until you are blue in the face. At the end of the day, lean on the agent, get a contract, sorted.

In terms of getting paid , if a company carries out work for another company and issues an invoice upon completion of the work you have no more or less hope of getting paid than with a contract in place, if anything more hope as a judge will simply look at the relationship and not all the get out clauses in a contract.

To form a binding contract - offer ( I will come to do some work ) , acceptance ( turn up to work and they don't throw you out) and consideration ( payment )

The last does not have to happen just the first two to bring a claim.

Indeed but you are talking about spending money on making that claim and getting it before a judge. Would a bit of effort to get a signed contract you can wave under the agents nose and get it sorted before it gets legal be a lot more sensible.

Both comments could quite possibly be true but both comments can be easily mitigated by insisting on a contract which shouldn't be difficult. If an agency refuses to give you a signed contract then something is very wrong.

**northernladuk** · 2 May 2012, 14:11

To the OP. Have you actually spoken to the agent and asked him WHY he isn't giving you a contract? Is he just being lazy putting you at risk when he doesn't care or is there a reason?

**AussieDigger** · 2 May 2012, 14:14

Originally posted by northernladuk View Post

To the OP. Have you actually spoken to the agent and asked him WHY he isn't giving you a contract? Is he just being lazy putting you at risk when he doesn't care or is there a reason?

Note I used the term 'agency' loosely. In actual fact, its a limited company that a director is running his contractors through, and he's too busy to bother doing all the right company stuff that sub-contractors (who are companies in their own right) are supposed to get). Added to that, he is also a permanent employee of ClientCo and acts as the hiring manager for his area.

Seeing some conflicts here ....

**Hex** · 2 May 2012, 14:38

I agree with NLUK in that if you are working renewal(s) with no renewal contract then you are effectively extending the terms of the original contract but with no schedule of work to be done in this renewal. This has got to be a red flag for IR35. If I were HMRC I'd be arguing that both you and your client were accepting that work was just ongoing until you gave notice. You are becoming part and parcel of the organisation this way and blurring the lines between you and permies.

Effect on Limited Company Liability Insurance without a signed contract