Can a contractor generally terminate a day-rate contract with no consequences?

Question

I am considering starting out in IT freelancing by taking some day-rate contracts via recruiters. As I understand it, the recruiter is paid an additional fee for the duration of the contract, on an ongoing basis, based on the day rate. However there is no employment relationship and I would still be self-employed (probably as a limited company).

Most advertisements for work that I see specify a contract length in months, and they're usually 3, 6 or 12, sometimes with the possibility of extension. My understanding is that this is just a rough indication, and the client may terminate the relationship with no notice, since they are paying a higher rate for this flexibility (this could be because a project was cancelled, they've hired a permanent employee, or they are not satisfied with the work provided, or for whatever other reason).

I am interested in whether there are generally any legal barriers for the contractor to terminate the relationship in a similar way? Or, if this is not explicitly contractually prohibited, is it generally seen by recruiters as a breach of trust that might discourage them from working with such a contractor in the future? I expect that for long contracts, a recruiter stands to lose substantial sums of predicted future revenue if the contractor pulls out.

There are many reasons why a contractor may wish to terminate the work early - for example, as a remote worker, I am thinking that committing oneself to an onerous commute may turn out to be more exhausting than originally thought!

I'm based in the UK, in case answers might vary from one country to another.

Answer 1

First off, only sign contracts if you agree and understand them entirely. If you don't see a clause you want, don't sign it. If you need a clause that allows you out in the same way as the client, explain you want that clause in there. Why can't you? No reason at all, make the request.

Do realize they may see you as a flight risk in this event. Is there a particular reason why you would want to leave with no notice? I've seen many contracts requiring 1-week or 2-week notice periods (one that required 1 month!), but every contract will allow you to get out... Right?

Point is, read the contract, and don't sign if you don't agree. There should be no reason why you can't leave with ample notice; I would give 2 weeks notice if I didn't have any clauses that said I needed longer periods. If I don't like a project, I can also claim that I'm just on the probation period (in the first 90 days), so I can leave for whatever reason in that time, just like the employer could let me go in that time for whatever reason. It's a double-edged sword, in that regard.

In my experience, I've been offered 3 and 12 month contracts, with the option of becoming a full time employee after the contract has expired. I have not taken these deals, due to the companies offering crap to me as a contractor, but they always promise green fields and rays of sunshine if I stay on. Do what makes you comfortable, and you'll feel much better.

Answer 2

I've always written or negotiated reciprocal notice agreements in my contracts. What is fair for one is fair for the other. If the client wants to retain the right to zero notice, I ask for the same right.

In practice, If I give early notice, I base it on my completion and wrap-up of a definable quantity of work - an upcoming release; the projects I've already started and begun billing for; the completion (agreed by both parties) of an orderly hand-off to someone of the client choosing, or another definable event that makes sense in that particular situation, at the client's option. I also assure them that, should they accept my offer to complete those remaining tasks, I will do them to the same standards to which I have done their previous work and to which they have a right to expect.

This is not something I write into my contracts; for fairness I will have negotiated a symmetrical contract with respect to giving notice. But for my professional reputation, personal ethics and self-respect, if it is my choice to bail out, I'll try to take the high road and minimize the adverse impact to my client. They of course have the option to decline my offer, dismiss me immediately, and pay me in lieu of any negotiated notice.

Update (direct answers to your questions):

• Specific legal barriers: It depends on the jurisdiction. In the US I believe it is all in the wording of the contract.

• How will it be seen by recruiters?: It will depend on the recruiter. A reasonable person understands that everyone's personal circumstances change or a good employment fit can go sour. S/he will look at how you handled the termination and how that affected their relationship with their client. Is this your recruiter? And the next recruiter reviewing your CV? You won't know til you get there...`