How to avoid losing your contract if you caught Covid-19

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How to avoid losing your contract if you caught Covid-19
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How to avoid losing your contract if you caught Covid-19

If you’re a seasoned freelancer chances are you’ll have experienced a client cancelling a contract at some point during your career, and as a result of the pandemic work has never been more unstable for any of us. If a contract gets cancelled it’s a major inconvenience and one of the less desirable parts of freelancing, but sadly it’s inevitable. Whilst you can’t stop it from happening, you can try to prevent it and ensure you’ve protected yourself if it does.

In this blog we explore the ways in which to do so.

Include a right of substitution in your contract

No one’s health is guaranteed, so if you’re forced to stop work on a contract due to illness you should check your contract’s terms and conditions for a right of substitution clause. Included in most contracts, regardless of whether you’re a contractor or freelancer, is the ability to suggest a substitute to complete your work, should you be unable to. So long as the clause is written that you’re able to choose your substitute, and the client has agreed with your choice, then you’re able to choose whoever you wish.

The client is more likely to agree to your choice if the substitute has the same or very similar qualifications and experience, so that they’re getting a like-for-like substitute, should the need ever arise. Many freelancers and contractors have colleagues they team up with for this very purpose, so it’s worth speaking to your contacts to see if you’re able to help one another out and form a reciprocal agreement. If you’re new to the industry and are yet to build up your network, try using contractor and freelancer groups on industry specific pages such as LinkedIn, or within group forums such as ContractorUK.

Ensure that before you commence work the terms of payment and contractual agreements for both yourself and your chosen colleague are in place. In most circumstances regardless of who completes the work, you are responsible for the overall arrangement which includes final payment and work submission.

Include a right to sub-contract in your contract

Does your contract allow you to sub-contract the entire work out if you’re unable to include a substitution clause? Should you fall unwell and be unable to complete the entire contract, then a right to sub-contract is the next best thing to a substitution clause. So long as the client agrees to these terms and again pre approves your choice of substitute, the same above conditions apply for a substitution clause as it does for a right to sub-contract.

Are you able to rely on force majeure?

If you’re unable to rely on a right to substitution or sub-contract, you may be able to rely on a force majeure clause if you have one included in your contract. The way in which it’s executed is conditional based on how it’s drafted, what it covers and what is excluded. Originally its purpose is to avoid the contract being terminated as a direct result of there being a delay in services, which are out of both yours and the client’s control.

This clause is usually invoked during a period of unsettle, such as the ongoing pandemic. Should you be unable to work due to contracting Covid-19, in order for force majeure to cover you you’d need to have used words in your contract such as ‘contagion, epidemic or pandemic’ to describe the effects of Covid. You’d also need to be able to demonstrate that you did everything you possibly could to prevent yourself from catching it, such as staying clear of international travel and proof of home quarantining if needed, and finally that the event was the root cause of your inability to complete the contract.

What else can you do?

Regardless of what clauses you have stated in your contract, there are other things you can do to prevent a major impact on your work. Consider the following:

  1. Discuss how you’d mitigate any unforeseen effect on your contract with the client prior to starting work, and ensure they understand your commitment to completing the work set out.
  2. Give your client all the available options. Present to them your findings and how each option could achieve their end goal.
  3. If you find yourself having to either use the right of substitution, a sub-contractor, or even force majeure be sure to have the agreement for doing so in writing from your client. Even better, amend existing contracts to ensure there’s no confusion later on.
  4. If you’re a seasoned contractor or freelancer you may have other ways which have worked in the past to help avoid such circumstances. Be sure to enforce them as you see fit, and share them with your colleagues, as just as you’re able to help them out, they may give you a helpful tip you hadn’t heard of!

How can Taxevo help?

Whilst our area of expertise is tax and accounts, we are well rehearsed in the daily needs and complex situations some contractors and freelancers find themselves in, and are able to help. Get in touch to find out more about how we can help you manage your accounts to bring home as much of your pay as possible, and for expert advice and tips for smooth sailing and stress-free contracting and freelancing.

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