Help! First-time UK contractor (working in UK) drawing up contract for USA client...

[ciarusvh]

Hi all,
As you can see I am new in these parts - hoping to ask for your collective wisdom, guided by experience!

Up until now, I've been employed by a UK Ltd company, part of a bigger US organisation. However, the US organisation is closing the UK company/office, and instead hiring me as part of the employed team we've had thus far, wants to secure my services as an independent contractor instead.

I'll be self-employed, still working in the UK, providing work on a "contract for services" basis, not "contract of service". My client will be securing my services from USA, not from the old UK company.

(My work will amount to about half of what I'm currently doing for them and leave me plenty of time to pursue other clients too. I'm delighted to have negotiated this new relationship out of the UK company closure. )

However, since I've never been a contractor, I have no clue where to start on drawing up this contract. Here are a few points that are worrying me:

* Should I insist the contract explicitly states it is governed by English law?
* What "early termination" terms are normal? How can I protect myself from unexpected termination?
* Ideally, I want to compose the contract here as I can hardly expect the US company to come up with one governed by British law. How much is it likely to cost me to get a lawyer to draw up something like this? Will I need a specialist, because of the international nature of the relationship, or does that have little effect?

Your experience and help is SO appreciated, thank you in advance! Of course, if there are any other tricky points you spot, which I have naively missed, please let me know....!

Ciarusvh

[Lance]

Join IPSE+

They provide lots of business support, and more importantly for you, some contract templates.

[TheFaQQer]

If your contract is governed by non-English (and Welsh) law then you should check your business insurances will cover you in the event of a dispute / claim.

[WordIsBond]

You can't "insist" on anything, but I'd push very hard for English law. If you get it, you don't need an international law specialist, it's governed by English law. I include mediation / arbitration clauses, since nobody wants to end up in court in these cases.

Take the time to understand IR35. If you get an IR35 friendly contract, you'll be in a strong position, because HMRC can't compel an American client to talk to them, so all they have to go on is the contract.

You simply can't protect yourself from early termination. Be good enough at what you do that they won't ever want to terminate you.

Specify in which currency you will be paid. And will they pay the funds into your UK account, or into a US account in your name? Get that all figured out. I have a US account that my US clients pay into in dollars. That means I take the currency risk. I wouldn't necessarily recommend that from what you've described. I've made a killing with it this last year (thank you, Brexit), but next year or the year after I could get killed. You are best agreeing a GBP rate and have them pay into your UK account. But if that is awkward for them, understand the costs (international wire transfers, perhaps US banking fees) and risks (exchange rate, possible delays in transfers) and get compensated for all that one way or another.

Can be a great way to go if you can figure out how to make it work.