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Handling unfair termination when contracting

When a project doesn't go well, contractors are often blamed for the problems, even when they are not their fault. This can lead to unfair termination, when the client or the agency simply blames you and puts an early end to your contract.

Blaming the Contractor Is Easy

But there are other causes that can lead to unfair termination. A client can find that the original budget for a project has been drastically reduced, or that the original objectives have been changed. Your manager is now stuck with finding a way to make everything right, and blaming the contractor can provide an easy way out for it all.

What Are Your Rights?

So the manager calls you into the office, and says: ''You've made a right mess of this project, and you're fired.'' What can you do?

If you've done the work, and you are being falsely accused, you have a right to compensation for unfair dismissal. This should include payment for at least part of the contract time remaining, as well as any other damages you may have suffered.

If you are going to enforce your legal rights, you need to compile a dossier of proof

Jonathon Little-Jones Day

The Strategy

The trick is proving what you've done. The best strategy is to pull together the best dossier of proof that you can, so that when your manager accuses you of making a 'right mess,' you can say: 'Not only is that statement entirely false, but I can prove it. And if you don't change your tune, my lawyer will call the tune in court with a demand for compensation.''

Very often a simple demonstration of strength on your part will make the manager think twice, or at least get the manager to see that a compromise on this with you is desirable. Because if you are obliged to go to law, the issue will be the subject of a complex debate--and when lawyers say 'complex' they mean 'costly.'

Keep Good Records

"If you are going to be able to enforce your legal rights, you will need documentary proof compiled as completely as possible,'' says Jonathon Little, a partner specialising in contract law with the London-based firm Jones Day. ''You should also ask fellow contractors to write statements on your behalf, and you should create a chart of progress, a kind of 'before and after' scenario.''

This is not as daunting as it sounds.

First of all, you should have been careful throughout the project to document what you've done. Keep all emails, indications of milestones reached or phases completed, and as many records of your work as you can.

Get as many of your colleagues on the project as you can to support you. If you are all being victimised in a group, that's good. Your combined testimony will be all that more damaging. Each one should write his own version of what happened and you should all compare notes.

Use your own technical knowledge to explain what happened. You know what you were hired to do, and what the project was for. In the chart, try to explain how things were at the start, what you did, and what was left to be accomplished. Use plain language. If the project's failure was due to negligence on the part of the client, explain what the client should have done and didn't do. Did the client fail to provide necessary materials? Were you given access to everything you needed?

Make the most convincing case you can. Then take it first to the highest-level manager you can reach, and lay out the case. Give them a good scare. If necessary, you could consider paying the lawyers to contact them and help in the scare. That won't cost too much.

Hopefully, that will get you at least part of what you deserve. ''These claims are difficult to prove in court, so if you can get a decent settlement out of court, you should consider yourself ahead,'' Little adds.

These claims are difficult to prove in court, so if you can get a decent settlement out of court, you should consider yourself ahead

Jonathon Little-Jones Day

It is of course frustrating to know that you are in the right but to accept less than all that you are owed. And, if the client refuses to negotiate, you should go ahead with the lawsuit if you've put sufficient proof together. But the best strategy is to get a reasonable settlement and to move on. Years of legal frustration should be avoided if possible, even if you know you'll win in the end.

Published: 14 May 2008

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