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UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 4312
Experience:  English solicitor with over 12 years experience
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A client is unreasonably trying to cancel a contract

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A client is unreasonably trying to cancel a contract by relying on a clause in the contract that says they can cancel any PO. However they have never actually sent a PO or quoted a number on any document. The consulting work they seek to cancel should have been completed last year, but our contact requested a delay to which we agreed. (We expected the work to be done in early 2014) Two phases of the three agreed in the contract have been completed and paid for. However out 2 main contacts unexpectedly left the company and now a new person is seeking to cancel the final agreed work - for which we will have allocated resource in our monthly plans etc. Do we have any legal arguments in our favour?

Have they given any reason for the cancellation and what does the clause in the contract say exactly?
Customer: replied 4 years ago.
The only reason is they feel they don't now 'need' the work. I can send clause in 15 minutes.
Okay, waiting for the clause.
Customer: replied 4 years ago.

An Order raised by JXXX may be cancelled at any time by XXX giving the Contractor 14 days’ notice in writing. A fair and reasonable price shall be paid for all work in progress and/or any part of the Services performed up to the end of the notice period which is subsequently received by XXX. XXX shall not be liable for any loss to the Contractor including consequential loss, which arises as a result of XXX’s cancellation of the Services pursuant to this Condition.

In that case I am afraid the contract is quite clear that they may cancel upon giving 14 days written notice and upon payment of a fair and reasonable price for all work done up to the end of the 14 days notice period.

All the best
Customer: replied 4 years ago.

OK, two further points:


1. They were given a volume pricing discount because of the total number of days agreed. Could we argue for adding back the discount under this clause in respect of the invoices already raised at the lower rate?


2. Since there appears to be no actual purchase order as such, is there a difference between someone simply placing an order versus what actually happened, which is that the person placed a verbal order, based upon the contract, for work to be done before end November. That person then verbally requested that we reschedule the work to a later time, which we agreed to.



3. Incidentally, the contract is dated specifically with an end date of 30th November, so perhaps we were no longer operating under the contract terms after that date?



1. Yes, this is reasonable on your part;

2.if the practice was that verbal orders were treated the same as written PO's, then the courts would recognise the verbal orders and give them the same status as PO's;

3. if both of you treated the contract as valid despite the end date of 30th November, then the courts would look at the terms of the contract as continuing.

All the best
Customer: replied 4 years ago.

Regarding (2), I guess what I am saying is this: is it a different scenario to just 'an order' versus placing an order for services to be delivered in November. Not cancel that order in November, but simply agree that the work will be delayed. So, in a sense, the work has been ordered AND confirmed as happening, and we (kindly) agreed to a delay. So that work was, in some senses, in progress rather than 'just' ordered.


Also, even now there has been no official cancellation in the way that the contract states. We have simply received an email. Might that help?

You could try and argue that the work was already in progress but deferred at their request and that as far as you are concerned, their email cancellation is not valid as it is not in accordance with the contract terms.

At the end of the day, you want money for whatever work you have done so far and you should negotiate with them and settle it with them amicably, otherwise the relationship will just break up for good and both parties will end up in court and face expensive legal costs and time.

All the best
Customer: replied 4 years ago.

Thanks and I appreciate we are somewhat clutching at straws and we do want to maintain the relationship if at all possible.


If we say their email cancellation is not valid, would this be breach by them? Or how otherwise might it help?


Could they simply then cancel properly without harming their position?


Finally, under your scenario, could we argue a reasonable cost for planning work, job scheduling, early stage research etc?



No breach by them, they may simply issue a correct notice.

Yes, you could argue your reasonable costs for planning etc.

All the best
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Customer: replied 4 years ago.