'I signed a contract with an agency, to start work last Monday. I was ill and unable to start last week. I thought I might have been able to start today, but my doctor has told me to stay off work for at least another 2 weeks. The agency claims this is a breach of contract on my part, and is putting them in breach of their own contract with the Client.'
An interesting problem, and I would imagine a fairly common one, although (so far as I can recall) this is the first time I've been asked to advise in such a situation.
As always, we start by having a look at the contract to see if there's anything in there which might directly cover the position; there isn't. It's a fairly typical agency contract - your company agrees to provide your services to the Client for the contract period, and is paid by the hour for doing so. Because of your illness, your company is unable to honour its obligations.
Your company's obligation is to provide the services of you personally - you are named as the one who is to do the work. Your company has agreed to provide you, but is not doing so. At the most simplistic view, this might indeed appear in breach of contract. However, this would seem to me a most unfair conclusion, and I find it very hard to believe that the law would regard your company as exposed to damages in such a situation. I can think of three ways in which the law would assist you.
The first is by implying a term into the contract, to the effect that your company would be relieved from its obligation to supply your services during any period when, as here, you are unable to work for reasons of health.
I think there is clear justification for implying such a term under the 'officious bystander' principle. This principle can be used to imply a term into a contract when a Court is satisfied that if a hypothetical and independent third party, standing on the sidelines when the contract was formed, had said 'shouldn't you include such-and-such a term', the contracting parties might well have been expected to say 'yes, of course, don't be so silly, that's obvious'.
A term won't be implied under this principle if it is clear from the wording of the contract that the parties have expressly considered the point, have decided for themselves how the eventuality is to be covered, and have made provision for it - because a term will not be implied into a contract where it would conflict with the contract's express terms. Here, the contract is silent on the point.
Alternatively, the contract expressly states that your company will not be entitled to receive, inter alia, 'sickness pay'. From this apparently simple and innocuous phrase, a Court might well deduce that the parties had not only expressly envisaged that there might be a period during the contract when the services could not be provided as a result of sickness of the named individual, but that they had made express provision for it by saying that no payment was to become due during such a period. No other consequences are provided for in that eventuality. The parties had clearly considered that the possibility might arise, and had made such provision for it as they thought fit. Therefore, there is no breach.
There is also something which the law delightfully calls 'frustration'. Briefly put, a contract is frustrated when something happens, after it has been formed, which makes it physically or commercially impossible for one or other party to perform his obligations. Where a contract is frustrated, each party is relieved from further obligation to perform. One of the classic cases on frustration is particularly relevant; in 1902, a Mr Krell agreed to let a flat in Pall Mall to a Mr Henry for 2 days for £75 (of which Mr Henry paid £25 as a deposit), so that Mr Henry could watch the coronation procession of Edward VII. The procession was cancelled as a result of new king's illness. It was decided that the contract had been frustrated, and Mr Krell was not entitled to the £50 balance.
Where, as here, the frustration is temporary, and it is likely that there will come a time in the future that you will be able to perform your contractual obligations, then it seems to me that the effect is to suspend the obligation to perform for so long as the illness makes it impossible for you to work (with your doctor's blessing, that is), rather than to terminate it.
I think you need not fear a claim for damages for breach of contract from the agency. For the same reasons, I think it unlikely that the agency need fear such a claim from the Client. All of which seems to me to make sense.
The one thing you must not lose sight of is that it is all very well for me to say that the legal position is as above; you must still be able to prove the basic facts. So get - and keep - a sick note from your doctor, just in case you need the evidence.
30th October 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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