'I was uncertain about my position when I heard that the Client I was contracting for was about to be taken over. On my request my agent approached the company most likely to take over. I asked at interview about a take-over; the interviewer said that there would be nothing to stop me joining them. I asked if there was a non-poaching agreement between the two clients, and was told 'no problem'.
The agency called me and said the client wanted to offer me a year's contract at the same rate. I said 'yes' and he said the contract would be in the post that night. The next day I gave the old Client notice.
Some days later the agency called and said the new Client was no longer offering me a contract, because of a non-poaching agreement they had with the old Client! The contract never arrived, and was two weeks before I could find another (less interesting) contract, at the same rate.'
In the last issue of FI we looked at the situation where a Contractor wanted to get out of a new contract which he had neither signed nor seen. Here we have the other side of that coin.
Was there ever a contract for the new position? We try and answer this by looking to see whether the three essential ingredients of a contract were present:
We all know the practice in the industry is for Contractors' companies to contract with agencies, and for agencies in turn to contract with Clients. There's no legal rule to that effect, but the established practice would make it very difficult for you to show that, as a matter of fact, there had ever been any likelihood of you contracting with the Client. So I think you have no recourse against the Client.
The rate, the period, the start date, the Client, and the duties had all been expressly agreed. It looks to me as though those were all the material terms. Not only that, but you'd previously been working for that agency, so it's likely that the other standard terms of that agency were already known to you, and therefore may also have been incorporated into any contract.
When you said 'yes' to the agent, was there any mutual intent to be legally bound? As we saw in the last FI issue, where it is clear that the parties envisaged that a written document would be prepared and signed, then that raises questions as to whether or not that mutual intent existed before the document was signed. Such a document might simply be a formality - a written record of terms that have already been agreed - or it might be that there is no actual contract until the document itself is signed. These are questions of fact that a Court would have to try and answer by looking at all the circumstances, and then forming a view on the evidence as to whether both parties had intended to be legally bound by the apparent oral agreement. You are alleging that there was a contract, so it's up to you to prove it, on balance of probabilities. You might, but I wouldn't put my money on it - the dice are against you!
If you did succeed, you'd be entitled to damages for breach of contract. You found a new position within 2 weeks (before your notice expired), and at no less money. So, apart from any expenses in trying to find the new position, you haven't lost out. The fact that the new position you ended up with is less interesting is too nebulous to make any difference, and in practice the damages you'd get would be minimal. So taking this and the uncertainties into account, I'd say it's not worth taking any action.
Just one thing though: the old contract was between your company and the agency, not the Client. You gave notice to the Client. Unless the agency had expressly appointed the Client as its agent for the purpose of accepting notices (unlikely), it follows that notice given to the Client was not effective to terminate that contract.
The lessons here are clear: if you don't want to find yourself out in the cold, make sure you have the new contract tied up and signed, before you terminate the old one. And give notices under a contract to the contracting party - not to someone else.
5th February 1998
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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