‘My contract says the Agent or the Client can terminate, but I can’t. The contract schedule says ‘Termination Notice: 1 month’ – does this give me the right to terminate? Is this legal?’
Your contract sets out termination provisions: the agent may terminate ‘on giving notice as specified in the schedule’ at any time. There’s nothing in the contract which says you have the right to terminate.
Parties entering contracts are, in general. free to do so on any terms they choose. Where contracts are written, the law presumes as a starting point that what’s written is a true record of what they agreed – of the consensus ad idem’.
We have to consider the terms and conditions and the schedule as what they are – separate parts of one whole contract. They have to be considered together, alongside each other, in order to work out what the terms of the whole contract are. Words used have their ordinary English-language meanings.
We look at the schedule and see the words ‘Termination Notice: 1 month’; one of the clauses on termination expressly invokes this by referring to the notice period ‘specified in the schedule’.
There’s no express term in the contract giving you the right to terminate. Can we imply a term into the contract to the effect that you should have the right to terminate on notice, or that the words ‘termination notice: 1 month’ also apply to you?
Other than where they are implied by statute or by custom, terms can be implied into a contract either where they’re necessary to make the contract ‘work’ (to give it ‘business efficacy’), or where they’re so obvious that if someone on the sidelines when the contract was formed had said ‘shouldn’t you include this term?’, both parties would have said ‘yes, that’s so obvious we don’t need to say it’ (the ‘officious bystander’ test).
I can’t see that we can make use of either of these two routes here to imply a term giving you the right to terminate. It’s not as if the words in the schedule ‘termination notice: 1 month’ are redundant, because the wording of the conditions that says that agent can give notice ‘as specified in the schedule’ – so we can’t say it’s obvious that something’s been missed out. So in answer to your question ‘since it simply says ‘termination notice 1 month’, does this refer to me too?’, I’m afraid my answer has to be ‘no’.
You then ask if this is legal; again, the answer is that, in general, parties are free to choose the terms on which they contract. One might say, ‘it’s legal, unless there’s some reason why it’s not’.
There are some circumstances where terms in a contract are unenforceable. If the performance of a contract would necessarily involve committing a crime or defrauding the taxman, it would be unenforceable. A contract between prostitute and client would be unenforceable for ‘immorality’ – so neither party could take action if the other failed to perform (!). A term ‘in restraint of trade’ is unenforceable, unless it is reasonable, having regard to the interests both of the parties and of the public.. The ‘reasonable’ bit is crucial, because all contracts are, to a greater or lesser extent, in restraint of trade. I can’t see that a contract which either expressly says it can't be terminated by the Contractor, or which is silent on the point (as yours is), is unreasonably in restraint of trade, unless the duration of the contract was unreasonably long. So yes, it’s legal.
Contracts which deny the Contractor the right to terminate early are in use by many agencies, and in my experience are unpopular with many Contractors.
The reason seems to me to be that by removing any right on the Contractor’s part to terminate, the agent goes a long way towards guaranteeing that his income from the contract will continue for the whole contract period. Bear in mind that most agents will be working on commission. Some might say I’m being unduly cynical, of course. But it seems to me that the drive for this type of provision in contracts comes from agents and not Clients.
There may be many reasons why a Contractor might feel the need to terminate early. I can’t help sharing the feeling of many Contractors that ‘sauce for the goose should be sauce for the gander’, and that if one party requires the right to terminate early, the other should have that right too. But Contractors may have to dig their heels in when negotiating contract terms, and maybe risk losing a contract opportunity, to achieve this.
12 December 1997
I'd really appreciate your feedback on this FAQ - so mail me and tell me what you think of it, if it's been useful to you, or let me know of any specific problem you have where I may be able to help.
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