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Early termination change on 1-day notice - contract breach?

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    Early termination change on 1-day notice - contract breach?

    Hi everyone!

    My Ltd is currently in a contract that was supposed to run until 28/2/2021. The agreement specifies a 30-day notice required to terminate the contract early from either party. On 15/12/2020, the agency served the 30-day early termination notice with the agreement that the contract will terminate on 15/1/2021. This was disappointing but perfectly in line with the contract agreement. However, yesterday the agency informed me that the client changed the termination date to 31/12/2020, i.e. today.

    Both the agency and end client representative have confirmed that this is not specific to my Ltd. I have always fulfilled all my obligations set out in the contract agreement and there were never any questions about the quality of the work (quite the opposite in fact). The end client is apparently cutting 90% of their contractors and external agencies. My understanding is that the end client got their budget cut heavily by their corporate headquarters for the Q1&2 of 2021.

    I informed the agency and the end client that my services are available until the agreed early termination date on 15/1/2020 and I expect to follow the terms specified in the contract. The agency told me that they cannot accept any invoice for work after today, quoting "force majeure -customer cancelling the contract with the agency on short notice" (I really doubt client cancelling the contract with them can be considered force majeure)

    I have read the forum, including threads where people were in a similar situation. I'm aware that normally contractors are paid based on signed timesheets and any notice periods are effectively meaningless. However, my contract agreement contains no such provision and I have never filled a single timesheet with the agency or the end client -- being one of the longest-serving developers on the project, I was really operating outside any team structures in a true consulting fashion. I'm not sure if this makes any difference?

    My question is if it's worth pursuing this legally and should I invoice the 2 weeks in January and attempt to recover it using a debt collection agency? My gut feeling is no, purely on the cost/benefit analysis alone - the 2 weeks are better spent looking for a new contract and the 2 weeks lost earnings are not significant in the grand scheme of things. However, I'm a man of a principle and I believe an agreement should be honoured. It bugs me that a massive corporation can bully small contractors like this while making billions in profit.

    I'd appreciate any advice, thanks!

    #2
    Don’t take legal action, that will only damage you professionally just for 2 weeks of invoice. Let it go and start looking for new gigs. Clients hire contractors for this exact scenario where they have no work and have to save cash.
    Vote Corbyn ! Save this country !

    Comment


      #3
      Won't comment on the contract breach, but I have experienced a number of times in the past where budgets get cut, contracts aren't renewed, then weeks/months later they get the budget and contractors are brought back. So I'd be careful about burning any bridges.

      Comment


        #4
        The client has no work to give you and no obligation to give you work.

        Sadly that is the end of the story.

        start looking for another contract
        merely at clientco for the entertainment

        Comment


          #5
          If they think they are rightfully legally ending the contract and you disagree... then forcing a debt collection won't do anything as companies wont pay a debt that's disputed especially with a party they no longer have a relationship with. That means you'll have to get them to recognize the debt and that will be costly. It's probably not worth it for 2 weeks that you aren't even working.

          Comment


            #6
            Originally posted by yncx View Post
            I have read the forum, including threads where people were in a similar situation. I'm aware that normally contractors are paid based on signed timesheets and any notice periods are effectively meaningless. However, my contract agreement contains no such provision and I have never filled a single timesheet with the agency or the end client -- being one of the longest-serving developers on the project, I was really operating outside any team structures in a true consulting fashion. I'm not sure if this makes any difference?
            If you were really working in a consulting fashion there must be something somewhere about getting paid for the work you do. Even if it's fixed cost there must be something in there that allows the work to stop and you not get paid. If there isn't and you get paid regardless you could have an IR35 issue. Or was it all gentlemans agreement and it worked so you got on with it? Situations like this always work nicely...until they don't and the lack of documentation becomes a mess.
            I'd say you are either missing something in the contract or it's not there when it should be.

            Either way, consultants work on a paid to do work basis. If there is no work we don't get paid, whether thats in the contract or not.

            When you say longest serving.. how long is long? Long time, as a developer, missing provisions in contract, etc sounds very part and parcel and other IR35 issues.
            My question is if it's worth pursuing this legally and should I invoice the 2 weeks in January and attempt to recover it using a debt collection agency? My gut feeling is no, purely on the cost/benefit analysis alone - the 2 weeks are better spent looking for a new contract and the 2 weeks lost earnings are not significant in the grand scheme of things. However, I'm a man of a principle and I believe an agreement should be honoured. It bugs me that a massive corporation can bully small contractors like this while making billions in profit.
            Absolutely not. There are a few reasons. Firstly, even if it didn't say it in the contract it will be a tough call to go infront of a judge as a consultant and argue you have lost money you didn't earn so you argument is weak at best. There is then the cost to do so and the problems that might come back and bite you.... All for two weeks money after a very long and lucrative engagement.

            You are probably annoyed about the situation but two weeks work compared to the cushy gig you have had for however long is peanuts. You never know as well, if you were that good they might invite you back. A good client in the backpocket is worth more than two weeks money.

            Forget your principles. It's business. You've had a great gig, suck it up and move on.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #7
              Your contract is with the agency not the client. You can't sue the client, they can do whatever they like. You would need to sue the agency, and they have already made the argument that the client isn't providing any work.

              The notice period would protect you from the agency replacing you with someone else, there it is cut and dried, i.e. the client is providing work but the agency is preventing you from working, then compensation is easy to justify. Under the current circumstances however although with a very clever lawyer you might be able to eek out some compensation, it probably isn't worth the expense.
              Last edited by BlasterBates; 31 December 2020, 12:44.
              I'm alright Jack

              Comment


                #8
                Originally posted by BlasterBates View Post
                Your contract is with the agency not the client. You can't sue the client, they can do whatever they like. You would need to sue the agency.
                You should have just stopped there.

                The agency owes him the money, they’ve already collected it from the client. Demand it from the agency (name and shame them here if they quibble). If they still don’t pay, take them to court.

                Comment


                  #9
                  Originally posted by hugebrain View Post
                  You should have just stopped there.

                  1) The agency owes him the money,
                  2) they’ve already collected it from the client. Demand it from the agency (name and shame them here if they quibble). If they still don’t pay, take them to court.
                  1) Do they - there is no obligation to provide work
                  2) Have they? Do you have evidence of that.
                  merely at clientco for the entertainment

                  Comment


                    #10
                    Originally posted by hugebrain View Post
                    The agency owes him the money, they’ve already collected it from the client.
                    Do clients pay agents before timesheets are even signed off?

                    Comment

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