FREELA62

Nothing signed - but is there a contract?

- a 'Freelance Informer' legal article from Roger Sinclair

'I was interviewed by a client for a position. The agency told me I'd got it, and sent me a contract. I spoke to the agency and they said the start had been delayed for a day, to which I said OK. But when I turned up to start, the client said there'd been some confusion. They interviewed me again, and then told me they didn't want me.'

This looks like another of those 'is there a contract' questions.

I've seen the 'contract', which is unsigned either by you or by the agency. There is also a covering letter from the agency, which begins 'congratulations on securing this new contract', and ends 'I hope you are satisfied with the way you have been treated…whilst securing this contract assignment'. The latter also asks you to sign and return the Assignment Schedules 'so that our accounts department can authorise prompt payment.' As a matter of law, it seems clear to me that the unsigned contract and the signed accompanying letter amount to an unconditional offer to enter a contract with you.

The effect of the telephone call when the agent told you to delay the start for a day was to amend the offer - which at that point had not been accepted. But by saying 'OK', you accepted the amended offer, and communicated that acceptance to the agent.

At that point it seems clear that all the ingredients necessary to form a contract were present -

you had not challenged their terms in any way, and so there was clear consensus on the terms were as laid down in the document they had sent you;
there was consideration (you would work and they would pay you);
the document contained no wording suggesting that there would not be a legally binding agreement until it had been signed by both parties, and the covering letter suggested simply that signatures were required for accounting purposes. The document also contained wording which suggested that if you turned up for work without signing it, you would nevertheless be bound by it. As a starting point it seems reasonable to presume that if a contractual document is prepared containing spaces for signatures, then there will be no binding contract until and unless both parties sign. But that presumption can be displaced by what the parties actually say and do, as long as that does not conflict with what the document itself says. I think it is also clear that both you and the agency intended to be legally bound by it.

So here we have a situation where, perhaps unusually, the document has been signed by neither party, and yet it is likely that it is legally binding on both. So what happened next?

You turned up for work, to be told by the Client that there had been some confusion, and (after interviewing you again) that they did not require your services. They sent you away.

One term of the contract says 'Should the Agreement fail to commence on the due start date and/or fail to commence at all (the agency) shall not be liable for any payment.' 'The Agreement' is defined elsewhere as the agreement between the parties, as recorded in the document itself. Logically, a contract - the binding legal relationship - commences when it is formed. Does this term simply mean that there will be no liability on the agency to pay unless a binding contract is formed? If so, one might think the term states no more than the obvious. But the words as such make sense, and terms in contracts do often do no more than state the obvious. Maybe the agency meant to say 'should the assignment fail to commence…' - but they were the ones who drafted the contract, and they didn't choose to say that. So I doubt whether or not this term affects the issue.

I think it is clear that it was a term of the contract that work would be available for you, throughout the contract period. As things turned out, work wasn't available. This is a breach of contract on the part of the agency. As a result, you would be entitled to damages. The damages would be the amount required to put you in the position in which you would have been, had the agency not broken the contract. The agency had the right to terminate on 4 weeks notice. You have the duty to mitigate your loss, by trying to find other work and giving credit for any other earnings during that period against your claim. You've told me you tried to find other work, but have not as yet succeeded - so your claim for damages is for 4 weeks earnings, at the contractual rate.

21^st August 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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