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If a Client Cancels a Contract, What are Your Rights?

When working as a contractor you should have a contract with your end client. Your contract is a legally binding document between your limited company and your client, which is set to certain standards and protects everyone involved. Useful Things to Know It might seem simple but understanding your contract inside and out will certainly […]

By Alex Graham on 14 Oct 2015
Read time: 2 minutes

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When working as a contractor you should have a contract with your end client. Your contract is a legally binding document between your limited company and your client, which is set to certain standards and protects everyone involved.

Useful Things to Know

It might seem simple but understanding your contract inside and out will certainly benefit you.

Usually your contract will be sent to you by your recruitment agency on behalf of your client, make sure once you receive it you read it thoroughly and don’t be scared to ask questions, if anything is unclear. At this point check you are happy with everything they expect from you.

So What Happens When a Client Cancels their Contract?

Unfortunately, there is no minimum notice period when terminating a contract, but you can however include notice rights within your contract with the client.

If for some reason the contract has not been signed or provided at all and you have begun the work for the client and can provide evidence through time-sheets, email communications and meeting notes, then English Contract Law may be applicable.

A little tip! – whenever you are negotiating with a client regarding a contract always make sure the words ‘without prejudice’ are included in the subject line in any and all communications, this covers you if anything goes south and ends up in the small claims court.

Make sure you think before you talk/type. You may think that if you discuss a friendly offer with a client stating, for example, that they can pay you just a month’s worth of fees and ‘be done with it’, that this is an easier option to ending the relationship/contract without any legal implications, but it actually causes more problems further on.

If this is the case and the matter is taken to court, then this statement could be seen as legal admission that you are only owed for that month which means that you cannot claim for anything more than just that.

Getting the Right Advice

If the matter does get taken further on you should seek out professional advice, but do not hire a lawyer for the majority of the case as this could get expensive. Instead hire one for maybe a few hours to discuss what the situation is, the implications and what you can do from then on forward. Then manage the claim yourself meaning that the cost of legal fees never outweighs what the claim is actually worth.

If you are seeking advice about contracts or any other queries then please contact us on 01253 362062 or email craig.whelan@nixonwilliams.com

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