Re: FN-FORUM: Contract termination - any legal experts?

date posted 2nd August 2007 11:20

On 2 Aug 2007, at 10:43 am, Carrie wrote:

> Firstly I am not a legal expert but, it sounds to me as if you may =20
> have a problem with a loosely worded contract.
>
> It also sounds as if they are treating you very badly.
>
> I am a bit confused about what you contract with them actually =20
> amounted to, you mentioned "fixed price" and also that you charged =20
> monthly by the day.

Yes, I wasn't very clear. This organisation tends to make all of its =20
contracts with consultants fixed-price as a (sensible) way to ensure =20
that project costs don't get out of control. However, their =20
established way of working involves them asking a consultant like me =20
to tell them how many days work a project will need and using that =20
figure to work out the fixed price.

All OK so far. Then they ask you to invoice monthly stating the =20
number of days you have worked that month. It seems weird - you might =20=

expect that a fixed price contract would set out the deliverables and =20=

then pay according to delivery or other staging arrangements. In =20
practice that wouldn't work with this organisation because =20
pragmatically what they are really buying is consultancy skills for =20
complex projects that often radically change their requirements mid-=20
project. Yes, really. So payment arrangements against deliverables =20
don't work well. I should say that this arrangement is for their =20
benefit more than mine. They are (verbally) very candid about this - =20
they want to have consultants effectively working on a retainer basis =20=

but to keep the "fixed price" small print in their back pocket in =20
case they need it.

> I assume that you did suspend work when they asked you, so they =20
> should pay your last invoice with no strings attached. If it is =20
> more than 30 days late you can charge them interest and start =20
> proceedings in the small claims court.

Yes. I stopped work as soon as they told me to. I have told them =20
about asserting my statutory rights under late payment legislation.

>
> I would write them a letter saying this, and pointing out that the =20=

> end of the contract has no bearing on this.

Yes. I just want to avoid using wording that disadvantages my =20
position when I write to them. Perhaps I need to consult m'learned =20
friends.

>
> Arguing about the contract will be another matter, and you may well =20=

> be wasting your time. Public bodies work from strict budgets and =20
> you will probably find that after their restructure they now do not =20=

> have a budget to pay you out of. This of course is not your =20
> fault, but as public bodies they don't necessarily care and can =20
> hang out for ages.

Actually I don't think that money is the issue here. This appears to =20
be more to do with their internal politics.

> It really all depends on what the original contract said about how =20
> much work was to be done for the fixed price and over what period,
> If for example it was to maintain a website for a year for eg =20
> =A31200, it might be reasonable to claim =A3100 for each completed =20
> month of the contract plus the notice period. But I guess it isn't =20
> that simple.

Well, that is where their established practice comes in. I can point =20
to the last 2.5 years worth of invoices where I have specified the =20
number of days I have worked and they have paid against those =20
invoices. I think that demonstrates that we had an agreed working and =20=

billing practice regardless of the small print in the contract.

>
> If you can do a sum like that it might be worth taking it to the =20
> small claims court, basically they operate a policy of =20
> reasonableness, wherever disputes about loose (or unwritten) =20
> contracts occur.
> If you can demonstrate that you are being reasonable you will get a =20=

> fair hearing.

Well, I think I am being reasonable. If they have a one month notice =20
period in their contract that must mean something. What do they =20
anticipate happens during that month? My view is that they either =20
offer me a month's work at the level of input I have been working to =20
already, or they pay me an equivalent sum.

> Check out the business link factsheets which are quite helpful on =20
> matters like this. They may even have someone local who could =20
> advise you.

Good idea.

> Do bear in mind how much time and energy chasing this will take =20
> you, sometimes it is better to just walk away.

Yes: this has been occupying too much of my energy for the last =20
month. I can't let them get away with bullying tactics though.

> Go after them for the last invoice though, and if you take them to =20=

> court for that you might as well claim for something for the notice =20=

> period -given their behaviour so far.

They are not going to get away with avoiding payment for that invoice!

> sorry if that sounds a little confused
> hope it helps

Very helpful, thanks.