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I recently had a major client terminate their Service Level Agreement (SLA) with my company in Canada, and I'm trying to assess what rights as a contractor I have since my fixed term SLA has what appear to be contradictory conditions.

My SLA contract with them, which lasted just for under a year, specifies it's a fixed term contract:

This contract will be in effect until the end of the current financial year, February 29, 2016. It is anticipated that this contract will be renewed on an annual basis subject to agreement by both parties.

Key considerations will be delivery of satisfactory performance by XXX [me] and agreement with regards to compensation terms.

In preparation for signing a new contract YYY's Executive Director [the client] will meet with xxx's principal [me] to review the previous year’s performance and to discuss future compensation terms.

However, this fixed term contract also has a provision that says:

Contract Commencement, Revision & Termination

The term of this contract commences upon signing by both parties. Regardless of the contract end date, at any time either party has the right to give notice to end this contract 90 days from the date of notice. During the notice period XXX will be expected to deliver IT services and will continue to be paid as per the terms of this contract.

I was served notice to stop working on the project on February 8th, just weeks before the contract's expiry. I was told they would pay me out for all of February (the last month of the contract), and that in addition to this, they would also pay me for an extra month if I agree to sign a two year non-solicitation agreement, a non-disclosure agreement and cooperate with a technical transition.

I did not receive a performance review, though I did receive promises to discuss negotiating a new contract.

However, because the notice period makes mention of the 90 days of notice, I sense that I should be entitled to at least 3 months of notice payout for the contract termination.

Based on the wording of this fixed term contract, do I have a legal right to demand 90 days of notice pay, even though my contract's termination is happening at the end its fixed term?

UPDATE: Turns out they want me to sign a non-solicitation agreement, so I think the extra month of compensation pay is being offered because in Canada non-solicitation agreements are not enforceable unless something of value is provided in exchange for signing one.

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joekickback
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2 Answers2

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Ignoring the non-existent expiry date, it seems they have no obligations after February 2016. The renewal was anticipated but not guaranteed - and since there apparently have been no talks regarding extension, the contract simply expires.

I would expect the 90 day period is for premature termination of the contract.

In addition, I would expect the contract to state the the anticipated extension should take place 1 or 2 months prior to expiry.

Compared to contract terminations I have experienced during my freelancing (in Denmark/Sweden), I actually find their payment offer quite generous as it even goes beyond their obligations.

morsor
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  • I agree (no obligations after Feb 2016 and generous terms in contract). I'm a contractor of 20+ years and prior notice periods for me were typically 2-4weeks, or none if the project was cancelled. Contracting is a service industry and your rate differs from an employee precisely to help you cover the cost of expenses/insurance/tax/early termination. In this case, the contract went full term. With all due greatest respect, you need forget the employee mentality and see yourself first as a service provider. – fiprojects Mar 08 '16 at 09:12
  • I previously answered something on startups stackexchange that might be of interest to you... https://startups.stackexchange.com/questions/8576/how-to-build-a-startup-freelance-software-qa-in-the-us/8585#8585 – fiprojects Mar 08 '16 at 09:24
  • @fiprojects This was my only client so to be honest I'm not really worried about the professional implications of pushing hard on the conditions if I can. The generous terms partly reflect the fact that I have been working on this project for nearly two years, but only recently as contractor through a company set up by me. – joekickback Mar 08 '16 at 22:04
  • @morsor I updated my question to show part of the contract that did discuss a review mechanism, as you see though it does not include dates for when to do this. – joekickback Mar 08 '16 at 23:58
  • @fiprojects Also worth stating the terms are generous because solicitation agreements require compensation above normal. – joekickback Mar 09 '16 at 06:15
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    Still - you have been paid in full. Now you move on. – morsor Mar 09 '16 at 07:21
  • You need to move on - review mechanism would imply changes to an existing contract - they are not changing your existing contract, it has reached its maturity. You expected/hoped for an extension, they did not offer it. You are bringing more stress and strain and if you rock the boat you will burn any future opportunity with this client. You have an employee mentality, not a service provider mentality. If you don't adjust that, every end of contract will cause you similar issues. – fiprojects Mar 09 '16 at 11:26
  • Almost all my contracts since 1996 were based on referrals, several led to contract extensions allowing me to move from one project to another with the same client. Eventually projects end (that is why they are projects). My longest was 6 years with one client - at one point I had ten one month rolling contracts until they raised enough cash to extend me for longer periods. Flexibility is the key to profits for a service provider. Trying to twist the arm of your client will only hurt you in the end. Learn and start looking for your next contract. – fiprojects Mar 09 '16 at 11:28
  • Interesting comment that your existing contract excluded non-compete clause - All my contracts going back to 1994 have always had non-compete clause written in from day one, preventing me from going direct to the client for a period of up to six months after the termination of the last contract. Who ever wrote your contract slipped up by not having that in from day one. You could decline the one month extension and see if the client wants to take you on direct. But seriously, avoid going heavy on legalities - it will hurt you and any reputation. – fiprojects Mar 09 '16 at 11:34
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"The right to give notice" is not the same as "required to give notice". The second clause you have quoted is about terminating the contract early.

user45623
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