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Contractor Doctor: Can clients cancel confirmed shifts without notice & compensation?

Dear Contractor Doctor,

I am a freelance cameraman and I’ve been working for the same client for five months now, although I have no contract. Every month, my client emails me the details of the shifts I have to work in the forthcoming month.

My client emailed me my shifts for this month, but three days into the month he has told me the shifts are cancelled and my services are no longer required with no notice, explanation or compensation. I’m seriously out of pocket because I turned down other work.

Can my client cancel pre-confirmed shifts with no notice and no compensation?

Thanks

Brian

Contractor Doctor says:

Although contractors are not employees, and therefore have no employment rights that might enable, for example, an unfair dismissal claim, they are business-to-business service providers and are thus protected by commercial contract law.

It is extremely unwise for a contractor to start working for a client without having negotiated and signed a formal written contract. However, contract law does recognise verbal contracts. So, if it can be proved that a contract has been legally formed then, even without the formal paperwork in place, the contractor technically has an enforceable contract.

It they then consider their client to have breached this contract, then the contractor could have the right to take action against their client. And, if there are any implied contractual terms covering termination of contract, such as a notice period, these should be applied.

What constitutes a contract?

For a valid contract to be formed, three elements must be in place:

  • An agreement on terms
  • A consideration (ie payment)
  • A mutual intent of each party to enter into a legal agreement.

So, if a contractor has agreed that they will be present during specific shifts to perform a particular task, such as operating a camera, a rate has been agreed for performing this task and the client and contractor are clearly intent on doing business, ie entering into a legal agreement, then a contract has been formed.

Even if a contractor does not have a written contract and they are in dispute with their client, it is important to scour all emails and other correspondence to check if the client has confirmed anything else in writing, such as a notice period or termination conditions.

However, although technically a verbal agreement between the contractor and the client can be enforced, the contractor will almost certainly face an uphill struggle to prove their case if the dispute ends up in court.

Taking action over a breach

Ideally, once the contractor has applied the above tests and is satisfied that they have a contract in place, albeit unwritten, and that their client has failed to uphold the contract by, for example, terminating the contract early, then the next step is to take action.

Of course, a contractor can make the claim themselves, but many clients will simply ignore such a claim.

It is at this point that professional legal representation could become essential if the contractor is intent on claiming compensation, particularly if the sums owed are considerable. Taking legal advice will clarify the strength of the contractor’s claim; pursuing a weak claim could leave a contractor much worse off than taking no action and moving on.

Taking legal advice will clarify the strength of the contractor's claim; pursuing a weak claim could leave a contractor much worse off than taking no action and moving on

A letter from a solicitor also sends a very strong signal to the client that the contractor is serious and won’t be fobbed-off or frightened by the client’s legal advisors. However, contractors should be aware that escalating the dispute in this way could be burning bridges for any future work with the client in question – clearly, it’s a judgement call for the contractor.

So, even without a formal written and signed contract, in some cases clients won’t be able to cancel a contractor’s future work without notice and without compensation. But that is no substitute for having a negotiated, signed contract in place before starting work.

Good luck with your contracting!

Contractor Doctor

Published: Tuesday, September 15, 2009

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