Advice for contractors who are considering leaving their contract early

As a contractor, you’ll likely be tied into a contract with a client for a fixed period. For different projects and in different professions, the timescales of contracts can vary. Some may be as short as one month while others may be 12 months or more. A lot can change during that time with personal life events and circumstances in your career often being unpredictable.

Given this, there are instances where as a contractor, you may need to consider leaving a contract early. But what are the legal implications of leaving a contract early and more generally, what is the best way to go about terminating a contract?

In this article, Markel Direct explain the implications of leaving a contract early and points to consider if you find yourself in this situation.

Firstly, it is important to make sure you are leaving a contract early for the right reasons. Leaving your contract early could impact your future contract opportunities with the company, and if it’s a big client who might have a lot of opportunities to offer, you may not want to be too hasty in your decision. There is also your reputation to consider – if you leave your contract early, without good reason, it may also have an impact on future contract opportunities with other companies.

Of course, most clients with understand when you have a legitimate reason for being unable to finish a contract, but where possible it’s helpful to demonstrate your reliability and receive positive testimonials from your clients.

Often, companies have a standard contract for their contractors which can make leaving a contract early difficult. In the contract, there may be a clause explaining the process you need to follow to terminate your contract early.

Having this clause in the contract is in the best interest of both parties, as the company using your services may also have a change in circumstances and need to let you go before the end of your contract. Typically, there will be a notice period stated for both parties, so you will need to read your contract and find out what this is so you can give the required amount of notice before departing.

Remember that it is in not just your interests but your client’s as well, for the termination to be as simple as possible. With this in mind, it may be worth simply speaking to your client and trying to arrive at a mutual agreement. If your reason for ending your contract early is personal, for example, if a family member is unwell, then they might be willing to end the contract sooner than the timescale specified and with a minimum of fuss.

If the project wasn’t what you were expecting or you have an issue with the position, the client might appreciate your honesty and feedback. Depending on the situation, being open with your reasons for leaving might result in a much more satisfactory conclusion.

If you believe that your client has failed to fulfil their contractual obligations and is in breach of contract and for this reason you would like to terminate the contract, it may be best to seek legal advice to ensure you are on the right side of the law before making any decisions.

On the other hand, if you suddenly leave a contract early without giving your client the outlined notice specified in the contract, you could potentially be in breach of contract. If a client if able to prove that:

1. there was a contract in existence
2. you didn’t complete your part of the contract in a satisfactory manner
3. they suffered a loss as a result of the breach,

they can sue for breach of contract. The legal costs incurred defending yourself in this scenario and the possible compensation payouts can be costly.

This is why it’s always important to refer back to the contract and speak to your client before making any final decision to leave a contract early.

For more complex situations, it is wise to seek the advice of an employment law solicitor.

It is also essential to make sure you follow good working practice and thoroughly read all contracts before you sign anything. If you are uncertain about any clauses in your contract, have a legal professional review your contract to ensure you are not signing something that may cause you problems in the future.

As an IPSE member, you can enjoy a 10% discount* on professional indemnity insurance from Markel Direct. Get a quote here.

*IPSE 10% member discount terms and conditions

The discount will be applied to the net policy premium before insurance premium tax is applied. All quotations provided will be subject to meeting underwriting and claims criteria acceptance. All cover will be subject to full policy terms and conditions which are available upon request.