I was due to carry out some consultancy work for an organisation but they are seeking to cancel the work, saying there is 'no contract'. Does a formal contract exist between us given the following parameters?
1. The formal terms and conditions of the contract for service have been agreed in writing and issued by the organisation for signing;
2. I have signed the contract but the organisation has not;
3. The commencement date was the 3rd February;
4. The organisation has shown clear intention to do business with me. Examples are the issue of a contract for signing, issue of a laptop
(although not received), the issue of a Purchase Order number and the
setting up an initiation meeting (which was subsequently cancelled).
Possibly incidentally, I have done a good deal of preparatory work.
I was due to carry out some consultancy work for an organisation but they are seeking to cancel the work, saying there is 'no contract'. Does a formal contract exist between us given the following parameters?
1. The formal terms and conditions of the contract for service have been agreed in writing and issued by the organisation for signing;
2. I have signed the contract but the organisation has not;
3. The commencement date was the 3rd February;
4. The organisation has shown clear intention to do business with me. Examples
are the issue of a contract for signing, issue of a laptop (although not received), the issue of a Purchase Order number and the setting up an initiation meeting (which was subsequently cancelled).
Possibly incidentally, I have done a good deal of preparatory work.
TIA
I would add in conclusion that this is not a simple area of law and the enforceability of your unsigned commercial contract is likely to require specialist advice if you decide to proceed.
On 18/02/2025 10:32, Simon Parker wrote:
I would add in conclusion that this is not a simple area of law and
the enforceability of your unsigned commercial contract is likely to
require specialist advice if you decide to proceed.
I am a pragmatist in this sort of litigation, and a lot depends on how
much the OP would be suing for.
If we are talking about £100s, or very low £1000s, I would suggest that
the OP leverages his advantage as a litigant in person, and presses
ahead without specialist advice, which could easily cost more than his
claim.
That leaves the defendant with the option of defending the claim at considerable cost, or offering to settle. The OP should do nothing to antagonise the defendant, and indeed should point out the unfairness of
what has happened.
Umm, the defendant is solvent, I suppose? And, a well established
company that isn't just going to fold, then start up again?
I was due to carry out some consultancy work for an organisation but they are seeking to cancel the work, saying there is 'no contract'. Does a formal contract exist between us given the following parameters?
1. The formal terms and conditions of the contract for service have been agreed in writing and issued by the organisation for signing;
2. I have signed the contract but the organisation has not;
3. The commencement date was the 3rd February;
4. The organisation has shown clear intention to do business with me. Examples
are the issue of a contract for signing, issue of a laptop (although not received), the issue of a Purchase Order number and the setting up an initiation meeting (which was subsequently cancelled).
Possibly incidentally, I have done a good deal of preparatory work.
I was due to carry out some consultancy work for an organisation but they are seeking to cancel the work, saying there is 'no contract'. Does a formal contract exist between us given the following parameters?
1. The formal terms and conditions of the contract for service have been agreed in writing and issued by the organisation for signing;
2. I have signed the contract but the organisation has not;
3. The commencement date was the 3rd February;
4. The organisation has shown clear intention to do business with me. Examples
are the issue of a contract for signing, issue of a laptop (although not received), the issue of a Purchase Order number and the setting up an initiation meeting (which was subsequently cancelled).
Possibly incidentally, I have done a good deal of preparatory work.
TIA
On 17 Feb 2025 at 17:59:45 GMT, RJH wrote:
I was due to carry out some consultancy work for an organisation but they are
seeking to cancel the work, saying there is 'no contract'. Does a formal
contract exist between us given the following parameters?
1. The formal terms and conditions of the contract for service have been
agreed in writing and issued by the organisation for signing;
2. I have signed the contract but the organisation has not;
3. The commencement date was the 3rd February;
4. The organisation has shown clear intention to do business with me. Examples
are the issue of a contract for signing, issue of a laptop (although not
received), the issue of a Purchase Order number and the setting up an
initiation meeting (which was subsequently cancelled).
Possibly incidentally, I have done a good deal of preparatory work.
TIA
Thank you everyone for your time and interest in the problem.
My current thoughts are to assert that contract exists between us and to submit an invoice at the end of the month for say, £1,200 for preparatory works, or it could be £3,000 which would cover the planned/ allowed (but not carried out) 40 hours of work. Welcome your thoughts.
I would also ask for compensation for loss of earnings (separately). The contract was for 4 months for £12,000. Not sure on the strength of this argument, or how much would be reasonable to claim for given the contract has a cancellation clause.
I don’t think the cost of paying for legal services would be justified given
the sums involved. Hence the appreciation for guidance on a credible approach from this newsgroup.
Background: I worked as an employee for the organisation and left, on good terms, mid-Nov. We agreed, prior to my leaving, that I’d do 40 hours a month
consultancy (as an individual acting as a sole trader) for 4 months starting in Jan. Whilst employed I worked on updating parts of the Employer’s Requirements document as well as other tasks. The consultancy work included developing this work further.
To give a feel for the work:
Schedule 1: The Consultant is required to lead and provide services to complete specific outcomes. (example) Updating the organisations Employer’s Requirements. I think the ‘lead’ means that I could carry out preparatory work.
My approach to the claim is to work with the following people from the organisation:
Contract manager on the legal technicalities;
Client (ie works manager): to ascertain the rationale for the cancellation; Executive director: to press the moral case for unfairness after working with the first 2.
Timeframe:
Scope of work informally agreed with works manager/ exec director mid-November
to start mid-Jan 25
Start date delayed several times to finally be 3rd Feb
Draft contract issued by the organisation 21st Jan
Organisation sends out agreed contract for signing 31st Jan, I sign on 3rd Feb.
Commencement date in contract 3rd Feb.
Laptop due to arrive 1st Feb. Email with somewhat frustrated client about ‘lost’ laptop 6th Feb. Informed that I would have access to the organisations
laptop mid-January (after I had purchased a new laptop for the purpose of carrying out the work)
PO issued 7th Nov.
Initiation meeting planned for 7th Feb, invites 31st Jan cancelled by Client on the 6th Feb.
Contracts manager emails stating organisation won’t sign 12th Feb.
I emailed client twice asking for an explanation, but no response.
I emailed contracts manager stating a contract exists 17th Feb.
Contract clauses
(Including actual wording with the organisation's name removed.)
Duties and obligations
"Services"; the services described in the Schedule 1.
Schedule 1
1. Overview of Requirement
1.1. The Consultant is required to lead and provide services to complete specific outcomes.
1.2. The Consultant will be responsible for:- Updating organisations Employer’s Requirements etc
I think the ‘lead’ means that I could legitimately carry out preparatory work
without further briefing from the client.
I will also claim for;
reviewing the organisations policies (as required in the contract) via the web,
setting up an admin system to record time,
time in securing PII cover,
time to set up the contract,
time to operate the contract,
time to set up as an approved supplier to the organisation,
email correspondence with client,
Other clauses:
Provide the Services with all due care, skill and ability and use his best endeavours to promote the interests of the Organisation
Unless prevented by ill health or accident, devote 40 hours in each month (variable subject to agreement) to the carrying out of the Services together with such additional time if any as may be necessary for their proper performance; and
I’m assuming that I can claim for operating the contract, ie this work on the
newsgroup!
Notice - Cancellation notice period; 2 weeks from the organisation 4 weeks from consultant. No limiting conditions. Termination without notice clause if gross misconduct etc.
I’m pushing for them to give me 2 weeks notice as this may enable me to claim
loss of earnings more successfully within the period that the contract runs.
Schedule 2 – Fees, Expenses and Payment
Organisation shall pay the Consultant a fee of £75 per hour. ….Consultant shall submit to the Organisation an invoice which gives details of the days the Consultant or any Substitute has worked during the month, the Services provided and the amount of the fee payable.
No mention throughout the contract regarding only paying for ‘satisfactory work’. Ie no legal grounds for refusing to pay for inadequate quality work.
Expenses comprises the following: The Consultant shall agree with the Client the process on how to reimburse these and other travel and subsistence expenses
I will seek to be compensated for PII costs and the purchase of a laptop/ admin software as expenses.
Again, many thanks for your time!
I would also ask for compensation for loss of earnings (separately). The contract was for 4 months for £12,000.
On 19/02/2025 13:40, RJH wrote:
On 17 Feb 2025 at 17:59:45 GMT, RJH wrote:
I was due to carry out some consultancy work for an organisation but they are
seeking to cancel the work, saying there is 'no contract'. Does a formal >>> contract exist between us given the following parameters?
1. The formal terms and conditions of the contract for service have been >>> agreed in writing and issued by the organisation for signing;
2. I have signed the contract but the organisation has not;
3. The commencement date was the 3rd February;
4. The organisation has shown clear intention to do business with me. Examples
are the issue of a contract for signing, issue of a laptop (although not >>> received), the issue of a Purchase Order number and the setting up an
initiation meeting (which was subsequently cancelled).
Possibly incidentally, I have done a good deal of preparatory work.
TIA
Thank you everyone for your time and interest in the problem.
My current thoughts are to assert that contract exists between us and to
submit an invoice at the end of the month for say, £1,200 for preparatory >> works, or it could be £3,000 which would cover the planned/ allowed (but not
carried out) 40 hours of work. Welcome your thoughts.
I would also ask for compensation for loss of earnings (separately). The
contract was for 4 months for £12,000. Not sure on the strength of this
argument, or how much would be reasonable to claim for given the contract has
a cancellation clause.
I don’t think the cost of paying for legal services would be justified given
the sums involved. Hence the appreciation for guidance on a credible approach
from this newsgroup.
Background: I worked as an employee for the organisation and left, on good >> terms, mid-Nov. We agreed, prior to my leaving, that I’d do 40 hours a month
consultancy (as an individual acting as a sole trader) for 4 months starting >> in Jan. Whilst employed I worked on updating parts of the Employer’s
Requirements document as well as other tasks. The consultancy work included >> developing this work further.
To give a feel for the work:
Schedule 1: The Consultant is required to lead and provide services to
complete specific outcomes. (example) Updating the organisations Employer’s
Requirements. I think the ‘lead’ means that I could carry out preparatory
work.
My approach to the claim is to work with the following people from the
organisation:
Contract manager on the legal technicalities;
Client (ie works manager): to ascertain the rationale for the cancellation; >> Executive director: to press the moral case for unfairness after working with
the first 2.
Timeframe:
Scope of work informally agreed with works manager/ exec director mid-November
to start mid-Jan 25
Start date delayed several times to finally be 3rd Feb
Draft contract issued by the organisation 21st Jan
Organisation sends out agreed contract for signing 31st Jan, I sign on 3rd >> Feb.
Commencement date in contract 3rd Feb.
Laptop due to arrive 1st Feb. Email with somewhat frustrated client about
‘lost’ laptop 6th Feb. Informed that I would have access to the organisations
laptop mid-January (after I had purchased a new laptop for the purpose of
carrying out the work)
PO issued 7th Nov.
Initiation meeting planned for 7th Feb, invites 31st Jan cancelled by Client >> on the 6th Feb.
Contracts manager emails stating organisation won’t sign 12th Feb.
I emailed client twice asking for an explanation, but no response.
I emailed contracts manager stating a contract exists 17th Feb.
Contract clauses
(Including actual wording with the organisation's name removed.)
Duties and obligations
"Services"; the services described in the Schedule 1.
Schedule 1
1. Overview of Requirement
1.1. The Consultant is required to lead and provide services to complete
specific outcomes.
1.2. The Consultant will be responsible for:- Updating organisations
Employer’s Requirements etc
I think the ‘lead’ means that I could legitimately carry out preparatory work
without further briefing from the client.
I will also claim for;
reviewing the organisations policies (as required in the contract) via the >> web,
setting up an admin system to record time,
time in securing PII cover,
time to set up the contract,
time to operate the contract,
time to set up as an approved supplier to the organisation,
email correspondence with client,
Other clauses:
Provide the Services with all due care, skill and ability and use his best >> endeavours to promote the interests of the Organisation
Unless prevented by ill health or accident, devote 40 hours in each month
(variable subject to agreement) to the carrying out of the Services together >> with such additional time if any as may be necessary for their proper
performance; and
I’m assuming that I can claim for operating the contract, ie this work on the
newsgroup!
Notice - Cancellation notice period; 2 weeks from the organisation 4 weeks >> from consultant. No limiting conditions. Termination without notice clause if
gross misconduct etc.
I’m pushing for them to give me 2 weeks notice as this may enable me to claim
loss of earnings more successfully within the period that the contract runs. >>
Schedule 2 – Fees, the Expenses and Payment
Organisation shall pay the Consultant a fee of £75 per hour. ….Consultant >> shall submit to the Organisation an invoice which gives details of the days >> the Consultant or any Substitute has worked during the month, the Services >> provided and the amount of the fee payable.
No mention throughout the contract regarding only paying for ‘satisfactory >> work’. Ie no legal grounds for refusing to pay for inadequate quality work.
Expenses comprises the following: The Consultant shall agree with the Client >> the process on how to reimburse these and other travel and subsistence
expenses
I will seek to be compensated for PII costs and the purchase of a laptop/
admin software as expenses.
Again, many thanks for your time!
As has already been said in a post to this thread, and with the greatest
of respect, the manner in which you have presented the facts of the
matter is most unhelpful. It jumps around all over the place and there
are gaping holes in what you have said to such an extent that I have
felt unable to respond in-line, as is customary, as that would cause my
reply to be similarly disjointed, hence my replying to everything at the bottom.
I suggest that if you are similarly unhelpful in presenting the matter
to the court, should it get that far, then you should not be surprised
should they be disinclined to sort through your presentation of the
matter in an attempt to create an accurate timeline and to extract the
key points, especially should your opponent do a much better job of
this, as, I would suggest, is likely.
From the above, my understanding is as follows (please correct as
necessary if this is not the case):
You worked for a company (C) as an employee until mid-November 2024.
(You do not state why your employment ceased, but it may be beneficial
to know this, especially knowing which side triggered the cessation of employment and why).
Prior to leaving, it was agreed between you and C that, following the cessation of your employment with them, your services would be retained
on a consultancy basis starting mid-January 2025 at a rate of £75 per
hour for forty hours per month for four months whilst you worked on
updating C's "Employer's Requirements" documents and carried out other
tasks as agreed. C was to create a contract for services covering this agreement and also provide you with the equipment necessary to carry out
the work, to whit a laptop and the relevant policies upon which you
would be working for C.
On the 7th November 2024 C issued a Purchase Order to you to cover what
had been agreed.
What, precisely, does the Purchase Order say please?
The contract extract you have provided states you are to "devote 40
hours in each month (variable subject to agreement) to the carrying out
of the Services together with such additional time if any as may be
necessary for their proper performance".
IMO, there are a couple of key points in here that merit exploring further:
Firstly, from the phrase "in each month" did you understand that to mean calendar months? That is, even though you had agreed to start
mid-January, were you still expecting to devote 40 hours of work to the
task in January, rather than a pro-rata amount based on the precise
start date?
Was the same arrangement to apply to the half-month it was envisaged
would at the end of the contract too? That is, were you expecting to
work 40 hours in January, February March and April (160 hours in total
spread over four calendar months), or a pro-rata amount for part of
January, 40 for February, March and April and a pro-rata amount for part
of May (still 160 hours in total but spread over 5 calendar months)? In short, was your understanding that you would be working until the end of April, or mid-May?
Secondly, I suggest that the phrase "together with such additional time
if any as may be necessary for their proper performance" is ambiguous in
the extreme and suggests to me that the contract was not drafted by a professional.
Despite a start date of mid-January having been agreed with the Works
Manager and Executive Director, this was delayed several times and
pushed back to the 3rd February.
In anticipation of a start on the 3rd February, a *DRAFT* contract was
issued on the 21st January. (I've highlighted the word 'draft' because
it is important to determine what changes, if any, were made and by whom between the Draft Contract being issued on the 21st January and the
Final Contract being issued on the 31st January.)
On the 31st January, a contract was issued providing that a laptop had
been issued and would arrive on the 1st February and that the work would start on the 3rd February.
Note: The 1st February was a Saturday. For the laptop to arrive on that
day, it must have already been dispatched at the latest on Friday, 31st
at or around the same time as the contract was issued. This could potentially be important as it demonstrates an intention to create
relations and a tight timeline. However, you make no mention as to the reason for the laptop not arriving on the Saturday, but allude to it by mentioning an "e-mail with somewhat frustrated client about the 'lost'
laptop on the 6th February".
Why did you wait until Thursday, 6th February to contact C about the
'lost' laptop when you were expecting it to arrive on Saturday, 1st and
were expecting to start work on Monday, 3rd?
You mention that you "had purchased a new laptop for the purpose of
carrying out the work". Was this laptop purchase authorised by / agreed
with C, in lieu of them not providing a laptop as agreed or was the
purchase a unilateral decision you made? Were you expecting to claim
back the cost of the laptop using the provisions for "expenses" within
the contract? If so, that appears only to apply to "travel and
subsistence expenses" meaning it would likely not cover the purchase of
a laptop.
Again, this may be important as it is typically a contractor's /
consultant's responsibility to provide their own tools of the trade,
save for any specialist tools, which may be provided by C on an
as-needed basis. A laptop is most certainly not a specialist tool, nor
does it seem that use of the laptop required C to provide specialist
software for you to carry out the tasks of the contract so it is unusual
that C agreed to provide a laptop to a contractor / consultant.
Additionally, it is possible that by C providing you with a laptop that
the contract moves into the realms of disguised employment, but I would recommend speaking to a specialist in employment law directly on this
matter.
Despite an agreed revised start date of the 3rd February, and you having sourced a laptop of your own and were therefore not reliant upon C to
provide one prior to being in a position to start work, the "Initiation Meeting" was not scheduled to take place until the 7th February, said
meeting being cancelled by C on the 6th February.
How, precisely, did you respond to the cancellation of this meeting?
On the 12th February, the Contracts Manager, acting on behalf of C,
notifies you that the organisation will not sign the contract.
You state that you twice asked for an explanation regarding this but
that no replies were forthcoming.
You make mention of a further request from you to the Contracts Manager
on the 17th February but provide no details of whether or not you
received a response.
However, you have previously stated that C's line is that the there is
no contract in force. When and in what form did C advise you of their
belief that no contract exists between you?
The contract provides for a cancellation notice period of 2 weeks notice
from C and 4 weeks notice from you.
Has C specifically served notice on you at any point?
Other than any necessary preparatory work, have you worked on any of the deliverables provided for in the contract?
If so, have you provided any of this work to C? If so, when and in what form?
Does the contract provide for the return of all materials to C at the termination of the contract?
Has C demanded back all copies of their paperwork you are currently holding?
Have you invoiced C at any stage for anything you have done? If so, how
much and when?
Now to the subject of any claim you may have against C...
The extract from the contract you have provided requires you to use your "best endeavours to promote the interests of the Organisation." Too
late now, but "best endeavours" is, from a legal standpoint, a very high
bar often misunderstood by many and by having agreed to use your "best endeavours to promote the interests of the Organisation" you have
seriously undermined any case you may have had against C.
Case law [^1] demands that "best endeavours" requires a party to take
all steps that a prudent and determined person acting in their own
interests and desiring the result would take. In short, you have agreed
to do everything in your power to "promote the interests of the Organisation", even if that means subordinating your own interests in
the matter, including, but not limited to, making a loss on services provided.
As I say, too late now but so that you are aware should there be a next
time, never, (Ed: well, hardly ever - and certainly only after having received specialist (i.e. paid for) legal advice on the matter), agree
to a "best endeavours" clause and instead substitute either "reasonable endeavours" ((lowest bar) take a reasonable course of action to achieve
the objective), "all reasonable endeavours" ((second highest) the
precise definition varies but it falls somewhere between reasonable endeavours and best endeavours), but better is "all reasonable but commercially prudent endeavours" (above reasonable but slightly below
best as it allows you to consider your own commercial interests
alongside those of the other party).
You state your intention to claim £1,200 for preparatory works. What precisely are the "Preparatory works" and how long have you spent on them?
At £75 per hour, that is 16 hours work - approximately 2 days. Is this
two day's work preparing to perform the work outlined in the contract,
or two day's work doing the necessary preparatory work to set yourself
up as a contractor?
If the former, I would suggest it could be a legitimate claim. If the latter, less so.
Save for the notice period, I would suggest that you cannot charge for
work you haven't carried out.
Working through the other items you've mentioned:
You mention charging for "reviewing the organisations policies". I
would suggest it is debatable as to whether or not you can charge for
this and, even if you can, how does this differ from the "preparatory
works" previously mentioned?
"Time in securing PII cover" - absolutely no chance of claiming this,
IMO, nor of the cost of cover. You are a contractor / consultant. It
is your responsibility to have suitable cover in place and for you to
incur the cost (both time and financial) in securing this.
"Time to set up the contract" and "time to set up as an approved
supplier to the organisation", again, IMO, this would not be considered allowable under the contract.
If you disagree with any of those conclusions, please provide details of
the precise clause within the contract upon which you are relying to be
able to justify the claim.
"Time to operate the contract" - if you have spent time creating
deliverables provided for within the contract, deliver them and invoice
for the time spent in this. If you haven't, there's nothing to deliver therefore nothing for which to charge them.
I would suggest that you absolutely cannot charge for "operating the contract" which you go on to describe as "this work on the newsgroup".
You may be able to make a claim for costs, which may include this,
should you be successful, but there are many hurdles to overcome between where you are currently and where you need to be to make such a claim, including succeeding in your claim against C.
In short, I would suggest you can invoice for a reasonable amount of
time spent in preparing to execute the contract. (It is for you to
justify why the charge is reasonable but I would suggest a charge in
excess of, say, a day or two is unreasonable but YMMV.)
I would further suggest you can charge for any time spent in actually delivering the work specified in the contract.
And, finally, for a notice period of two weeks, namely £1,500 (20 hours (being two weeks work) at £75 per hour).
I would suggest a claim for "loss of earnings" would be futile, but, as above, suggest taking advice from a specialist in employment law.
You mention your desire to avoid paying for legal services. With
respect, you are floating figures well in excess of £10,000 thereby excluding allocation to the small claims track and are going against a company that may well engage the services of a professional in defending
a claim, particularly when they may be able to reclaim such costs from
you in the event they are successful, or if you abandon the claim before
it is allocated.
I would suggest that your best course of action lies in finding a figure which is justifiable in court should the need arise, but low enough to
make it uneconomical for the company to defend and therefore simpler and easier to just pay you to make the matter go away.
You know the company better than me but, IME, this will be a much
smaller amount than you are suggesting in your message, especially when
you have agreed to put their interests ahead of your own, including
incurring losses if necessary.
Regards
S.P.
[^1] Jet2.com v Blackpool Airports [2012] EWCA Civ 417 [^2]
[^2] https://knyvet.bailii.org/ew/cases/EWCA/Civ/2012/417.html
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