How to terminate a contract before it is even started

**kirk** · 28 October 2006, 09:31

Hmm, I was in the same position a few weeks ago; signed the contract then the permie position I was in offered me something better. I ended up taking the contract as I wouldn't have felt comfortable backing out of the agreement.

**malvolio** · 28 October 2006, 09:48

Originally posted by lolo

Chaps,

Need some advice here. Last week have signed the contract to start in pretty soon , but got another offer today (which I somehow more like).

What would be the options here. I would like to contact the agency saying sorry - have changed my mind as I got something better, will not be starting next week.

But is this legal as the contract is already signed on both parties. Termination clause is two weeks but really don't like to start something which I know shall end in just few weeks. Another customer could wait no problem - but really like to avoid all nastinies here.

Cheers,

Lolo

You've answered your own question - you've signed a legal contract to deliver something, you are therefore bound to deliver it. So something better has turned up; well shame, but tulip happens.

You can try to negotiate your way out, but that might be risky, especially if there are no immediate replacements on hand. The agency may let you off, but more likely they will ask for some compensation: apart from anything else you will be damaging their relationship with their client, which is way more important to them.

One hint: if you do try to get out, do not mention why. Tell them you have to move to Iceland for six months to nurse your sick granny or something.

**Denny** · 28 October 2006, 10:26

Originally posted by malvolio

You've answered your own question - you've signed a legal contract to deliver something, you are therefore bound to deliver it. So something better has turned up; well shame, but tulip happens.

You can try to negotiate your way out, but that might be risky, especially if there are no immediate replacements on hand. The agency may let you off, but more likely they will ask for some compensation: apart from anything else you will be damaging their relationship with their client, which is way more important to them.

One hint: if you do try to get out, do not mention why. Tell them you have to move to Iceland for six months to nurse your sick granny or something.

The EB has no right to compensation at all. After all, it's just as likely the client could have pulled out of the agreement at the 11th hour, so what then? Would the EB then ask the client to compensate them for offering the role and then withdrawing? You are also in a strong position because no timesheets have been signed so the EB can't withhold any of your money.

I would reconsider. Your contract probably has a month's trial in it anyway, and probably no notice on their side, so why not take advantage of it and walk away. Make sure the other job is still open to you though.

**MarillionFan** · 28 October 2006, 10:36

What is the standard cooling off period for signing a contract?

**malvolio** · 28 October 2006, 11:44

There isn't one. It's a contract for the supply of services, not an HP agreement.

Denny - you're wrong, if he's signed and doesn't honour it, he can be sued. Far better to be totally professional, and either negotiate a graceful exit, or use the notice period.

{/hobby horse} Then again, if we didn't get people thinking contractual obligations were irrelevant incovneniences, expenses are things you use to avoid paying tax on income and composites are a sensible way to run a business, we probably wouldn't have IR35 and all the general hostility towards contractors in the first place. {/hobby horse off}

**foritisme** · 28 October 2006, 13:47

As Malvolio says - tulip Happens

My last contract finished, with an offer of an extension, just couldn't get them to agree a start date. After two week wait I decided to go for something else, got a new contract, close to home but £100 per day less. Guess what happened the day after I signed ?? Yes an offer of a 3 month extension!!!

Very close to going back to them, but then again never walked out on a contract in 13 years and won't start now.

You have to decide how you want to run your business.

**lolo** · 28 October 2006, 15:02

Thanks guys,

Yeah, I never walked on a contract myself. That's why I am feeling a bit nervous. But legally - it is not even started (although signed off). So, isn't there somehow cooling off period, for any contract to be in force. Does it start from the last signature written on the paper?

Otherwise, I think I'd better show up, otherwise somebody will be very unhappy. Just feel uncomfortable to hush up and pretend.

Cheers,
Lolo

**Denny** · 28 October 2006, 16:09

Originally posted by malvolio

There isn't one. It's a contract for the supply of services, not an HP agreement.

Denny - you're wrong, if he's signed and doesn't honour it, he can be sued. Far better to be totally professional, and either negotiate a graceful exit, or use the notice period.

Sued for what - where are the material losses that a judge can pick his way through on the EBs part caused by the contractor? Damage for work already done (badly) can be sued for, not work not done and has yet to be paid for. Do you know of anyone who has actually been sued for not starting a contract? I don't. There are too many variables for an outright case for damages - how can any EB prove that the amount of time and effort used for placing the contractor resulting in material losses prior to the contractor starting? They can't - mainly because these charges are not legally the responsibility of the contractor anyway. The only cost met by the EB is if they needed to consult a solicitor to change the contract terms before the contractor pulled out. As you know, this rarely happens.

Storm in a teacup.

To avoid hassles though, the best way to extrapolate from the gig is to announce that you forgot to put some critical qualification on the CV you think the gig requires for you to do it successfully. If they still want to sue - tell them they didn't carry out reference checks properly to ensure that you were suitable for the gig and therefore are likely to be deemed liable. Tell them that you owe it to the client to have the right person for the role, which isn't you. That'll shut them up because any objection of their part automatically looks like the EB is self-interested rather than putting their client first. No EB will risk that, if they have any sense, particularly if you threaten to spill the beans to the interviewer your given reasons which would also, of course, include the EBs objections, should they be raised.

**thunderlizard** · 28 October 2006, 17:50

As always, it depends. On stuff.

Breach of commercial contract tends to be covered by a reasonable damages clause. If so, the simplest (but not cheapest) way to do it is to find out what 'reasonable damages' is, and whether you can stomach paying them. The only time I ever did something similar, we agreed on agent's commission per billing unit * number of billing units until the end of the contract (or notice period if you've got one).

If you're ditching a short term, low billing contract for a long term, high billing contract, you might work out it's in your best interests to pay the damages and secure yourself a quiet life.

How to terminate a contract before it is even started