UK Contracting Notice Period Legalities

[SimonMac]

A contract can be written, implied or verbal but, in order for it to be effective, it has to be entered into by two parties who are capable of understanding the agreement i.e. not drunk or mad. A written contract can contain anything you like but whether or not the terms that you include are legally enforceable is a different matter. IANAL but I think, in these circumstances, a legal bod reviewing the case would argue that the OP was capable of reading the contract and understanding the terms contained therein and would therefore reasonably understand the possible implications for his business and the recruitment business if the contract was breached.

Can we use someones dumb ass posts on an internet forum as proof of their failure to understand an agreement?

[DaveB]

I am a UK contractor with a registered limited company.

My contract stipulates that my agency can terminate the contract within 7 days notice, where as the I cannot give notice, and can only leave at the end of the assignment or extension offer.

Is this legal, and If I were to leave would they have the right to sue me for damages incurred by my absence for the remainder of the agreed contract period?

It is a contract between your company and theirs, not you as a private individual.

Assuming you were in full possesion of your faculties and were in a position to sign on behalf of your Ltd co. when you signed it, yes it is legal and yes they *could* sue your company, not you personally, for breach of contract were you to leave early.

Whether they will or not is a different issue as had been discussed already.

Given the opportunity I would actually go back and request that the contract be amended to remove the 7 day period altogether and allow them to terminate with no notice at all, as this is a much stronger indcator for IR35 - See here for an explanation why.

[LisaContractorUmbrella]

A contract can be written, implied or verbal but, in order for it to be effective, it has to be entered into by two parties who are capable of understanding the agreement i.e. not drunk or mad. A written contract can contain anything you like but whether or not the terms that you include are legally enforceable is a different matter. IANAL but I think, in these circumstances, a legal bod reviewing the case would argue that the OP was capable of reading the contract and understanding the terms contained therein and would therefore reasonably understand the possible implications for his business and the recruitment business if the contract was breached.

[SimonMac]

I am a UK contractor with a registered limited company.

My contract stipulates that my agency can terminate the contract within 7 days notice, where as the I cannot give notice, and can only leave at the end of the assignment or extension offer.

Is this legal, and If I were to leave would they have the right to sue me for damages incurred by my absence for the remainder of the agreed contract period?

Well actually no they can't sue you as they could only do that if you were stupid enough to originally sign a dumb ass contract like that, oh you already have and now want to welch?!

[ASB]

I am well aware of this but you are reading far too much in to my post. It has the potential to go to court and all that stuff you said... but very rarely to almost never does for contractors.

Should the OP worry unduly about it.. no.. Thats all I was saying tongue in cheek. You did spot my post before it?

Rumbled.

[northernladuk]

<too much serious stuff>

I am well aware of this but you are reading far too much in to my post. It has the potential to go to court and all that stuff you said... but very rarely to almost never does for contractors.

Should the OP worry unduly about it.. no.. Thats all I was saying tongue in cheek. You did spot my post before it?

[ASB]

Ah, indeed so but the full term I would have used used would have been Potentially yes but realistically no.

What is potential is if they would take it further, which never happens hence the play on words.

Comes down to the definition of "illegal" or "unlawful". Consider:-

a) Contrary to law. Particularly "criminal law" 12 men good and true.

b) Oh well, different view. Under civil tort.

A differentiator is sanction. Consider a divorce. If you can sort out financial settlement yourselves good. For lots of reasons. If you can't then the MCA determines how a judge will pronounce. Have you done anything illegal or unlawful simply by not being able to agree? No.

If you have a contract dispute then has the loser done something unlawful? Doubtful

Is there legal sanction? Yes. The judge makes the decision.

But, illegal is a strong (though often fair) use of words.

Ultimately, you win something in court does not suggest the away team did anything illegal.

Perhaps that second bottle should not have been opened.

[SueEllen]

Is this legal, and If I were to leave would they have the right to sue me for damages incurred by my absence for the remainder of the agreed contract period?

Yes they can sue you.

However depending on how much they have lost and the reason for the staff of your company leaving they may not be decide to.

I mean if you didn't turn up for 5 days because you were critically ill in hospital and whoever else is an officer in your company terminates the contract, then they won't sue unless they are stupid and want bad publicity.

The best way to end a contract where there is no notice on your side is to get the client to end the contract. The agency may then threaten not to pay you but all you need to do is turn around and threaten to take them to court.

[Wanderer]

I am a UK contractor with a registered limited company.

My contract stipulates that my agency can terminate the contract within 7 days notice, where as the I cannot give notice, and can only leave at the end of the assignment or extension offer.

Is this legal, and If I were to leave would they have the right to sue me for damages incurred by my absence for the remainder of the agreed contract period?

Get this straight, it's not your contract, it's your company's contract. You won't get sued, your company will get sued. Except that they won't sue because you could just close the company down and they would probably get nothing except a big legal bill....

Your company has entered into a business to business deal with another company. If your company doesn't perform it's obligations under the contract then the other company may sue your company. Most often, a client or agency would use the breach of contract as an excuse to withhold payment from your company with the amount of "damages" being co-incidentally equal to the amount of money owed to you when you try to terminate the contract.

My feeling is that agencies are using these one side termination clauses to bully contractors. If you are in this situation and you want to leave then you should take legal advice or you will probably find yourself shafted by the agency/client and out of pocket.

If your company is considering signing a contract with a one sided notice period then you should negotiate with the agency/client to have it removed if you are not comfortable with working that way.

Legal advice and a contract review might be a good move. Good luck!

[northernladuk]

There is one word too many in there. The only thing that is potential is whether they would succeed. The right is there.

Ah, indeed so but the full term I would have used used would have been Potentially yes but realistically no.

What is potential is if they would take it further, which never happens hence the play on words.

[ASB]

Potentially yes.

There is one word too many in there. The only thing that is potential is whether they would succeed. The right is there.

[ASB]

Is this legal, and If I were to leave would they have the right to sue me for damages incurred by my absence for the remainder of the agreed contract period?

a) Yes. That clause is certainly legal. Whether it would be upheld in a contractual dispute is different. I'd want long odds against it though.

b) Yes. Anybody has the right you describe. Success of defending it? If you just left slim. If there were other factors related to that contract, less clear.

c) Not asked. What would those damages be? Strictly limited to the financial loss. However this could be potentially limited by the agency regs. It could also be more than the "lost commission". Very much more.

d) VERY IMPORTANT. It takes the other side to bring action to get any judgement unless you decide to capitulate should this happen. Who has the bigger balls?

e) Can you work out where their value judgement might be? Will they bring action - doubtful under the terms most people work under. Simple thing. If you ask a question "is this term legal" you never understood the downside of what you are agreeing to. Never sign a contract you don't understand. You didn't. (sorry harsh).

[/NLUK off]

[northernladuk]

And check this thread out.... very useful...

http://forums.contractoruk.com/welco...uk-forums.html

[northernladuk]

If I were to leave would they have the right to sue me for damages incurred by my absence for the remainder of the agreed contract period?

Potentially yes.

[sabobin]

I am a UK contractor with a registered limited company.

My contract stipulates that my agency can terminate the contract within 7 days notice, where as the I cannot give notice, and can only leave at the end of the assignment or extension offer.

Is this legal, and If I were to leave would they have the right to sue me for damages incurred by my absence for the remainder of the agreed contract period?