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Alex J.
Alex J., Solicitor
Category: Law
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Experience:  Solicitors 2 years plus PQE
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I am an accountant and have a signed contract

Resolved Question:

I am an accountant and have a signed contract for consultancy services for a company. The date of signing was 29th May. The commencement date on the contract is 3rd June, although this was changed by email communication to the 8th June. The services were for 30 days of work until 31 July, which was roughly 3 to 4 days per week. As I am self employed, I have not actively pursued other income streams for this period, and I have also turned down other work opportunities in order to fulfil this contract. I got an email from the company last night to say they are withdrawing from the contract. There is a termination clause whereby the company need to give me one month's notice. I asked them to pay me one month's notice, but they refused saying the termination clause does not come into force until the commencement date. Is that correct? The termination clause does not refer to the commencement date. Or, can I claim for loss if earnings due to the work I have turned down in order to fulfil the contract?
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.
Hi
Thank you for your question and welcome.
My name is ***** ***** I will assist you. The commencement date of the services is different to the effective date.
The effective date is the date the contract is signed and the parties agree to enter into legal relations.
You agreed with this party to enter into a services contract to commence on a certain. They are terminating the contract before the services start without cause (which I assume they are not expressly allowed to do). This is a breach of contract. I would therefore say you can claim all losses that are reasonably foreseeable and a naturally occurring consequence of the breach. Bare in mind any contractual claim for damages will be limited by the fact that the other party could have terminated on one months notices on the commencement date.
Kind regards
AJ
Customer: replied 1 year ago.
Thanks very much for your advice. Can I just ask for clarification on a couple of things. Instead for a claim of damages , can I purely request they pay me one months notice since the termination clause seems to apply from the effective date rather than the date of commencement of services? Or do I need to prove how much money I have lost as a consequence. This could be rather difficult as because I have not actively pursued other income streams for this period, it would be difficult to quantify what this income would have been. Also, the reason they terminated the contract is because they recruited someone on a permanent basis and they were able to start immediately, they thought it would take 2 or 3 months to recruit . (The recruitment of this person is not mentioned any where in the contract.) Many thanks
Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
Ideally you want to try and avoid court.
What I suggest you do is write to them and say they are in breach of contract. Say as a result you have suffered loss and damage. You can then say to them you are prepared to settle for the value of one months notice and therefore one months services. Say if they do not pay you reserve the right to take any action available to you including court action - and seek to recover the cost of doing so from them.
If they are refusing to pay the one month notice - you need to put pressure on them and you can do this because you have a wider claim for breach of contract.
Kind regards
AJ
Customer: replied 1 year ago.
Great , thanks. Does the fact that they emailed asking to change the start date to the 8th June count as a variation to the contract? The actual signed contract still states 3rd June. If the email doesn't count as a variation then they would actually have terminated the contract after the commencement date , which would mean I would be entitled to the months notice regardless. Thanks.
Expert:  Alex J. replied 1 year ago.
Hi
Thank you.
If you accepted the email as a variation then it is valid (assuming the contract does not allow them to vary the commencement date). If you did not it is not valid.
In any event it does not matter - the commencement date is the start date of the services - if the contract was signed and dated and in force then terminating it before the commencement date is a breach. If you breach a contract you need to quantify your losses and part of this means taking into account that the contract could be terminated on one months notice.
Kind regards
AJ
Alex J., Solicitor
Category: Law
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Experience: Solicitors 2 years plus PQE
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