'I was offered a contract by an agency, to start work overseas in 6 weeks time. They said they needed me to sign something straightaway, and faxed me a one-page form, which I signed and faxed back. The form said a written contract would be sent out later that day. In fact that didn't arrive until 5 weeks later, and when it did, it was unsigned, showed a revised start date 2 weeks later, and contained many other terms which hadn’t previously been discussed between us. I did not sign this. The day after the original planned start date I called the agency to try and make some arrangements to meet the client's staff, since I had by now moved overseas to where I was to be working. The agent then told me the client had a problem and the contract was cancelled.'
We need to approach this by considering
1 was there a contract formed when you signed and faxed back the one-page form
2 was any contract formed by that varied or superseded at any later point
3 was there a breach of that contract
4 if so, what are the consequences?
I've considered the one-page fax. It makes clear the identities of the agency, of you, and of the client. It sets out rate, start date, duration, and working week, and notice provisions. And it provides for termination on 30 days notice. It also provides that the agency can terminate without notice before the start date (I'll come back to that). It is signed by the agency and by you.
It contains, so far as I can see, sufficient to amount to all the material terms of a contract. There is consideration. There is nothing which might suggest any reluctance on either part to become legally bound by the signing of it. I have no doubt that when this was signed and faxed back by you, a contract was formed between you and the agency, and that all the material terms of the contract were set out in that one-page fax. So the answer to my first question is 'clearly, yes'.
And to answer a question I am asked from time to time, 'yes, fax is a perfectly acceptable way of entering a contract' - use of fax is purely a mechanical device for transmission. The key issue on accepting an offer of a contract is that it is formed when the acceptance leaves your control on its way back to the offeror, by a means the offeror has agreed (expressly or by implication) to accept. By using fax to send the offer to you, and by (as here) expressly asking you to return acceptance by fax they made clear that fax was an acceptable way to communicate acceptance. Indeed, had they sent you a carrier pigeon and asked you to return your acceptance by attaching it to the pigeon's leg and then throwing the pigeon out of the window, that too would have been sufficient (just as well it was only one page, seeing what some agencies produce nowadays…).
Whilst the fax said 'written contracts are being prepared today and sent out by post', there was no suggestion that these would contain any different or additional terms (although I don't think my advice would change, even if there had been such a suggestion). Did the later unsigned written contract you received from the agency alter things? Well, it was neither signed by them nor accepted (either by signature, or by any other means) by you. So, to question 2, 'no'.
By the time the start date came, nothing further had happened, save that you had moved overseas so as to be ready for the contract where you (as you thought) would be working for the next year. You were ready to start work, but had been told by the agency that the client was not ready for you. The next day you spoke to the agency, who then told you the contract was cancelled.
The contract gave the agency the right to terminate without notice before the start date. However, the start date had now passed. Their only rights to terminate now, according to the one-page faxed contract, were on 30 days notice. Therefore, by purporting to terminate without notice, the agency was in breach. To question 3, 'yes'.
They are in breach, and so liable to place you in the position in which you would have been, had the contract not been breached. Had it not been breached they would have had to give you 30 days notice to terminate. You are entitled to liquidated damages of a 30 day period - 20-22 working days, depending on where the weekends fall - at the contractual rate.
You should use all reasonable efforts to try and find another contract elsewhere to start as soon as possible, and you should give credit in respect of any periods during that month when you are working elsewhere - with one qualification: whilst you are probably not entitled to claim you removal expenses in addition (even though you then had to move back to the UK), there is a good argument for saying that you could cover these expenses first from any such alternate income, before being required to apply that income in giving credit against your claim.
The term entitling the agency to terminate without notice before the start date was I think grossly unreasonable in your situation. This time it did not affect you adversely, but only because the agency shot themselves in the foot by failing to actually terminate before the start date. But contractors who are asked to make commitments to new contracts long before the start date should think very carefully before accepting terms which allow the agency to terminate before that start date without notice - it really is locking the Contractor in, without a similar commitment from the agency.
24th
November 2000
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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