Contractor doctor: did I breach the contract by leaving early?

IR35 Test

Dear Contractor Doctor,

A year ago, I left a contract giving 1 week's notice. My contract with the agency stated that my notice period was "N/A". From my understanding the term was ambiguous in a business sense and did not stipulate either that I couldn't give notice or that I didn't have notice to give.

The agency is still withholding my last payment saying that I am in breach of contract and can be sued if I persist. Can you shed light on this type of notice and on what it actually means?

Thanks,

Chris

Contractor Doctor says:

It is not unusual for contractor agreements to lock contractors in without possibility of termination. According to the Hove-based legal consultancy Lawspeed, it is entirely standard in the contracting industry for contractors to be locked in to a short-term contract without the right of termination.

Why should contractors not be able to terminate? Because they have signed on as guaranteeing the completion of a specific project, so they can hardly decide that they no longer wish to finish it.

The use of the abbreviation 'N/A' in your contract is less typical, but it clearly means 'not applicable,' which simply means that you had no right to terminate.

If you had intended to include the right to terminate in the contract, you should have negotiated a clearly defined termination clause. You would then have been able to invoke it when you wanted to leave.

We wish that the news were better, but under the circumstances, you have no apparent right to your final payment. Indeed, you breached the contract by leaving and you could be liable for damages. Best to leave this one alone and to move on.

Good luck with your future contracts.

Contractor Doctor

Published: Thursday, September 27, 2007

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited. Please see our copyright notice. If you want to use any content you have seen on this site then please request our media pack and ask for details of our Content Licencing Service.


Readers Comments...


  
Bookmark and Share
  
     
  

Latest Site Updates

IR35’s replacement isn’t a simple legislative game – it’s Guess Who? with 1.4m people IR35’s replacement isn’t a simple legislative game – it’s Guess Who? with 1.4m people

Because flexible workers come in all shapes and sizes, and are given various labels in different sectors, creating an IR35 replacement won’t be easy.

New online Employment Status Tool to help contractors navigate IR35 and beyond New online Employment Status Tool to help contractors navigate IR35 and beyond

Contractors and freelancers can freely access a reliable online tool providing a highly accurate interpretation of their employment status.

An IR35 replacement will be a challenge An IR35 replacement will be a challenge

The Office of Tax Simplification’s search to find a successor to IR35 that might please all presents a huge, potentially insurmountable, challenge.

ContractorCalculator: Contracting news in brief ContractorCalculator: Contracting news in brief

News this week includes HMRC to be “less combative”; ongoing demand for IT, offshore and energy contractors; and public sector pain begins.


  
     

  
  

Advertisers

DarwinPay AM Limited InniAccounts ContractorCalculator Marketplace IR35 Test
  
Contractor accountants - pricing checklist
  

Advertisers

Contractors Handbook

The expert guide for UK contractors and freelancers

Darwin Pay - up to 88% Return

Contractors can take home up to 88% of the contract safely.

Parasol - get paid quicker

4 payrolls a day. Calculate your take home pay now.

Bedouin Group

No more IR35. Retain up to 85% of your earnings.

PCG Bedouin Group D J Colom Accountants Contractor Financials NewsNow
  
Contractors Handbook

  

The UK's leading contractor site. Independently audited traffic (ABCe) – 126,578 monthly unique visitors.