Contracts can be a difficult problem that contractors have to face, especially for those with limited experience in this area. Once a contract has been agreed, neither party can make changes to it without the other persons permission so it’s important that you raise any concerns you have before you sign it.
Do Not Work Without a Contract
The most common form of legal involvement for contractors is through contracts, most often with clients. The first thing to remember is that you should never commence a contract if you have not actually signed a contract confirming the terms of the agreement, including the services you will be providing and the payment you will be receiving in return.
Some contracts provided by recruitment agencies or clients will incorporate indemnification clauses, which will state that the contractor is liable to pay for any losses that are incurred due to certain actions. In some cases this can even include things like not making the deadline, so whilst it may be difficult to get these clauses removed, you should be able to negotiate them to ensure that you have the minimum liability.
Restrictive Covenants
One thing to look out for with recruitment agencies is the so-called “restrictive covenants”. These are clauses in your contract with the actual recruiters which states that you are not able to work directly for a client but must go through this agent.
For example, if you get a short contract with a client through a recruitment agency and on completion they then ask you to work for them again for a longer period. If you have a restrictive covenant in your contract with your recruitment agency, they would be entitled to a cut of this new agreement even though the client has offered you the contract directly. If you find one of these in your contract, it is best that you do whatever possible to try and negotiate it out if you can.
In some cases differences can result in a legal dispute. This is best avoided where possible because if it comes to having to enlist help from solicitors even just in the form of advice, they costs can quickly rise. The best way to ensure this is to avoid agreeing to terms that you don’t understand, don’t be afraid to question the clauses in an agreement or even seek legal advice when signing them. The cost of having a solicitor look over a contract will be a lot less expensive than the cost of a dispute.