I feel a bit of an idiot, in relation to my earlier question about a contract with no clear duration or clear exit clause (paid as an assistance role at a fixed fee), as in the end I trusted my friend's orally assurances back last year, but in my defence this was my first business contract, and it probably isn't his fault (guessing any problem lies with his client, or he is happy with the arrangement his end so lack of urgency on his behalf - suspect a bit of a 'yes' man). Basically my problem is that despite numerous oral assurances it wouldn't last more than 6 months, the contract is still on and only about half completed - hopefully (via a fixed fee), because the client of my client (in New Zealand) is controlling the speed of the project - basically it turns out that I am unable to work and therefore unable to submit an invoice on the project unless both of us are working together which now primarily means working down in New Zealand (or me having to go up to Newcastle, but at the rate things are going won't be able to afford soon). He leases software used on the job on a monthly basis. In theory as I have told my client there are still ways of working - using remote desktops, but for reasons unknown to me he isn't keen on the idea, and prefers to wait till his client says 'jump'.
I am getting a bit stressed out, well more worried (but he doesn't know that yet - still smiles to my client at the moment, as trying to min. arguments) as he doesn't have fixed costs to uphold, unlike myself (I need to fund a house for example). If I was to let this continue for much longer it has the potential to at the very min. make my company (as this is my sole initial contract) go insolvent, at worse make myself get into debt (has the potential, if it drifts on like this for months). Putting aside the money issues, because I am contracted to this other company, and the times I can work are been dictated by his overseas client, I am unable to look for other work without risking myself going breach of contract in case his client says it is time to return and I was in say the middle of a short term IT contract here in the UK.. starting to verge as a kind of zero hour business contract. This is not the arrangement I was told orally, where his client had an urgency to get things done.
The last invoice to my client was back in March, it is now May - spending a few weeks (max of 5) at a time in New Zealand to do the work. Laughingly one of my org. contractual concerns when I agreed to the contract was that I might be down there solidly for months (as was given that oral impression), leaving my house in charge of a relative, so had a clause in my contract that I couldn't be away more than 60 days at a time - for house insurance reasons (this obviously hasn't been an issue).
What options do I have ? Do I have any options ? I am getting close to the point of even CONSIDERING letting my company go insolvent and hopefully walking away from this contract but not even sure that would be the end of it (see below), and it is an extreme possible solution.
One thing I did do in my business contract (via my own limited company) was add two clauses that explicitly state that he/his company cannot go after any assets of directors of my own limited company (namely myself). Would in the extreme case of making my company insolvent be a way out ? Or are there any less drastic methods ?
Thanks for any help. Sorry for the length of this, but wanted to give some background.
Hi Nicola, Thanks for reply. I am willing to wait a week or so. But not sure if can be answered. Would it be easier if I simplified my question? Goes on a bit as I am under a bit of stress, but wanted to make things as clear as I can my end.
Thanks for getting back in touch, there is no specific rush on this, as not scheduled to go back to New Zealand any time soon.
I have read my contract and there is no clear end clause other than when I assume the contract his end is signed off and terminated or when the fixed fee is paid (was concerned about this prior to signing as no clear duration or deliverable given but was orally assured it would be ok basically paid to assist on his job but to a fixed fee), but the section on termination reads as follows - I have replaced client's company name with XXX to keep in the rules of justanswer.co.uk (note nothing I could find for my own company):
SUSPENSION OR TERMINATION OF THE SERVICES OR THE AGREEMENTXXX may terminate this Agreement or suspend or terminate any or all of the Services inwhole or in part for any reason whatsoever and at its sole discretion at any time by giving 14days notice in writing to the Sub-Consultant.XXX may terminate this Agreement without notice:10.1.1 if the Sub-Consultant is guilty of any serious default or misconduct in connection withor affecting XXX; or10.1.2 if the Sub-Consultant commits any serious or repeated breach of his obligationsunder this Agreement or is guilty of serious neglect or negligence in the performanceof his duties; or10.1.3 if the Sub-Consultant is unavailable to provide his services for a period of fourconsecutive weeks or a total of 30 working days during this Agreement; or10.1.4 if the Sub-Consultant fails or is expected to fail to complete the Services.If XXX is in material breach of its obligation under this Agreement and/or any Call Off Orderthe Sub-Consultant shall notify XXX in writing of such default and in the event that XXX failsto remedy such default within 14 days of notice or in such reasonable time to be agreed theSub-Consultant may terminate their engagement under this Agreement and/or the Call OffOrder forthwith.If the Sub-Consultant’s engagement under a Call Off Order is terminated or if the Services aresuspended XXX shall make payment to the Sub-Consultants for all services carried out andexpenses incurred prior to the date of such termination or suspension and, where either theServices are suspended or the Sub-Consultant’s engagement under a Call Off Order isterminated in the absence of any default on their part, all costs incurred by the Sub-Consultant incidental to the orderly termination of the Services.Termination of the Sub-Consultant’s engagement under a Call Off Order shall be withoutprejudice to the rights and remedies of either party arising out of or in connection with theAgreement.
On another side issue, there is a section that reads as follows..
2 SUB-CONSULTANT'S OBLIGATIONS2.1 The Sub-Consultant shall perform the Services:2.1.1 using all the reasonable skill, care and diligence to be expected of a qualified and experienced member of the Sub-Consultant's profession undertaking works similar in scope and character to the Project, and:2.1.2 in such a manner that XXX can comply with its obligations under the Main Appointment.2.2 The Sub-Consultant shall indemnify XXX against any loss properly incurred by it arising out of any failure to perform the Services in accordance with clause 2.1; or any other breach of this Agreement caused by the Sub-Consultant.
Any help in knowing a way I could get out of this contract 'nicely' would be helpful, but if it doesn't result in agro for myself, would as an extreme solution consider making my company insolvent as a last resort (which at the rate things are going on could be a possibility anyway). I haven't quite reached that point, and it isn't just the money aspect, but the fact that I cannot look for alternative work in the UK during the 'down periods' as his client In New Zealand could want us back at a short undetermined notice period. In an ideal world, should have got a retainer fee with this contract to pay when I cannot work on the contract (if I had known what the reality was going to be).
Thanks again for any help.
Hi Alex, yes, if there is a way of just terminating it I would like to know. Not saying I would use it just yet, just would like to know if there is that option available. I have received some more 'oral' assurances that this contract will be ending soon (I guess it would end anyway when the fixed fee is paid), but if it doesn't materialise than might have to use whatever I can to end it :-( In the end my client cannot really give an assurance, as the ability to work on the job is been dictated by his client.
Thanks again for your assistance. I live and learn.
Hi Alex. Not in those words. I suspect though, that if I did try to terminate it he might play on the 'lost income' even supposed future lost income route. I do feel extremely bad having to even consider this route, but anxious on the impact financially to myself, I know (or think I know) a lot of the problems have occurred by his client dictating the pace. A lot of accepting the contract was based on oral assurances on duration/pace of working. If you think it might be better or safer just to ride it out, than I will take that as an answer, but if this contract gets spun out to who knows when they might have to review it, so was kind of hoping for an answer before that situation occurs (or I go broke).
I politely put the issue to him yesterday about my ability to not be able to bid for work in the UK, and his reaction was that this was not an issue as I merely needed to explain to another employer in the 'down periods' that I might have to disappear overseas.. but what employer in their right mind would employ someone under those grounds other than perhaps temporary work (but for programmers you tend to be hired for a project deliverable on a fixed duration, not suddenly disappear mid project) - that I might suddenly have to disappear for potentially upto 60 days. Crazy from my point of view, but to be fair haven't tried it, as I think I know the answer. But I have moved off on a tangent..
Many thanks Alex. Much relieved. Excellent service. That is all I needed to know thanks.