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Self Employed - what happens if I can't complete a job?

Discussion in 'Serious' started by gcwebbyuk, 7 Jul 2013.

  1. gcwebbyuk

    gcwebbyuk Dib Dabbler

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    I am a self employed IT consultant / programmer. I became self employed as my health was preventing me from working full time. It has been good so far, with a steady and manageable stream of work (nearly 3 years now).

    It is always in the back of my mind that at some point I might not be able to complete work, especially programming. Where do I stand legally if I get to a point where this is the case? I have Business Insurance (Public and Products Liability, Professional Indemnity, Business Equipment and Goods in Transit). I do not have contracts with my clients (other than verbal).

    So if I am unable to complete work due to health, is it up to me (legally) to find a replacement, or act as a middle man between myself, the replacement and the customer? Or as there is no written contract, is up to the customer to find a suitable replacement?

    Any help would be appreciated :thumb:
     
  2. RedFlames

    RedFlames ...is not a Belgian football team

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    *facepalm*

    I'm not sure where you legally stand, however this is why you must a contract when doing work for someone... It sets in stone what they expect from you [and when], and what they expect from you... it also covers both parties if either doesn't live up to their end of the deal [I.e. they don't pay up or you don't complete the job]...
     
    Last edited: 7 Jul 2013
  3. longweight

    longweight Possibly Longbeard.

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    Verbal contracts?

    Good luck with that.
     
  4. gcwebbyuk

    gcwebbyuk Dib Dabbler

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    I agree with both of you about contracts/verbal contracts. The issue here is not with getting paid etc, as I invoice monthly on work carried out that month, it's more a case of moving forward what happens if my health gets worse and I have to give up a project without completing it.
     
  5. RedFlames

    RedFlames ...is not a Belgian football team

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    that's the point... a contract would have that covered... it would outline what would happen if you were to pull out/not deliver... regarding payment, what happens with/to work already completed and so on...
     
  6. cc3d

    cc3d It's a mod mod world

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    I have been self employed for a while and the I would NEVER work without a contract. Ever! People (and people's memories) are too volatile.

    With that, I would look to passing the work to another contractor. Do you have colleagues in the same work? If not, find some who can. As a contractor, I feel it's my responsibility to complete what I promise, even if I have to sub-contract it out at a loss.

    Hope this helps.
     
  7. Burnout21

    Burnout21 Is the daddy!

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    You need a generic contract that you adapt for each project/contract.

    I would suggest, you create a clause that stipulates you hand over all work at the date you can no longer care on due to health, etc. If you outlined this at the beginning of the project meeting, they can either counter offer or agree.

    I'm actually surprised you've got this far without written agreements.

    A written contract signed means you can outline project costs, time frames and rewards on early completion. With out that you may as well give your services for free.
     
  8. Nexxo

    Nexxo * Prefab Sprout – The King of Rock 'n' Roll

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    ARE YOU ****ING NUTS?!?

    That is all.
     
    RedFlames likes this.
  9. gcwebbyuk

    gcwebbyuk Dib Dabbler

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    Thanks for the advise.

    The difficulty is, that the clients I work with I have known for the past 3 years (plus longer in some instances) and they would probably get concerned if I requested that we have some form of contract. Most of them I see socially as well as through business - so a more casual interaction.

    My clients are all small businesses, and we work together on a trust basis and for my support type clients I always work on the understanding that if my work/performance is poor then they are free to look elsewhere.

    I have a few programming/web development clients and most of the work is completed within a month. I have a couple of larger projects though, and these are the ones that concern me sometimes.

    If I was to take on a large development job (above £2k), then I would see a good reason to have a contract in place, but this is the exception rather than the rule.

    With this in mind though, as cc3d has said - and I mentioned in my op, finding a replacement contractor is the decent thing to do. I will soon be contacting the client in question to discuss the matter (they knew my health issues when we started the project together) so will see how things go...
     
  10. Corky42

    Corky42 Where's walle?

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    Not sure how it works for other self employed trades, but if i couldn't finish a job for what ever reason it would be expected for me to pay for a sub contractor to finish the job.

    If i just said sorry cant finish that job because my head has fallen off i would expect them to take me to court.
     
  11. gcwebbyuk

    gcwebbyuk Dib Dabbler

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    I think it works the same in the IT world too - I just can't find any firm info on it.

    Would you take the subby on yourself - or arrange for the subby to work as a contractor direct with the client?

    Do you have written contracts with your clients?
     
  12. Burnout21

    Burnout21 Is the daddy!

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    My contracts are £20K plus, it's unthinkable not to have anything written down.
     
  13. gcwebbyuk

    gcwebbyuk Dib Dabbler

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    That kinda dosh - yeah I would definitely feel a need for a contract...

    I will do some research into a local developer who I could sub out if needed. At least then I have a back-stop. Hopefully I won't ever need to use them, but just in case...
     
  14. Nexxo

    Nexxo * Prefab Sprout – The King of Rock 'n' Roll

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    Sorry but working for friends definitely requires a contract to separate professional from personal relationships.

    You may argue that you can trust them, but consider this scenario: you do a job for a friend. Just before he is due to pay you, he gets hit by a car end ends up dead or in a coma. Who is going to pay you? Or what if his business goes into receivership? How can you prove that you're owed?

    What if there is a misunderstanding about the job or the price quoted? You have to be able to prove not just to your client, but also all your other clients/friends that you're not the one trying to pull a fast one. A contract protects your reputation too.

    Remember: your mortgage, your livelihood and your dependents rely on your income. Your work and time are valuable. There should be a contract to emphasise that this is serious business.
     
  15. Burnout21

    Burnout21 Is the daddy!

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    Nothing worse than chasing a unpaid invoice.
     
  16. Krikkit

    Krikkit All glory to the hypnotoad! Super Moderator

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    What everyone has said +1, also:

    If they're professionals, get a contract drawn up for each of their jobs (if ongoing), and make it clear that you've been advised to make the change to a more formal business structure in case your health ever fails you... They should understand, I can't see why any reasonable person wouldn't.
     
  17. gcwebbyuk

    gcwebbyuk Dib Dabbler

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    Thanks for all the advice, I will take it on board.
     
  18. gcwebbyuk

    gcwebbyuk Dib Dabbler

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    Do you have any suggestions of contract templates? I work on a predominantly ad-hoc basis - so when problems arise, I get called in, rather than have a maintenance agreement etc.

    If I were to move towards contracts, even for the very small businesses - would you suggest moving to a maintenance agreement? If so, how do you go about working out pricing?

    At the moment, I charge an hourly rate and invoice at the end of the month. If there are any larger items that are purchased for the client, I generally ask them to pay up-front to avoid late payment and to aid my cash flow.

    So far (touch wood), the longest I have had to wait for any invoice payment is about 20 days - my invoice terms are Net 7, but as times have got harder their payment dates have slipped slowly. I have some that pay within a day or two of invoice though. Most invoices are below 1k each so we aren't talking amounts that would put me in the brown stuff if a client didn't pay for months (I would obviously not work until the invoice had been paid though).

    Maybe I am just too laid back with work. To be honest, when I went self employed, I wasn't expecting work to go as well as it has. I left a 9-5.30 job working as a senior techie which became too much for my spine to take. Now I can earn enough working from home, and resting when not working.
     
  19. cc3d

    cc3d It's a mod mod world

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    I think the most important thing for a contract is to just have:

    the agreed upon work, in detail.

    the delivery date

    agreed price and payment terms.

    Sometimes just emailing this to the client requesting a reply of agreement is enough. Otherwise, ask for a signature.

    If it's friends or family, ask for payment up front (LOL)

    hope this helps

    CC
     
  20. RedFlames

    RedFlames ...is not a Belgian football team

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    Embed vimeo video

    ^-- i also recommend you watch that, it is aimed mainly at creative industries, but it highlights why contracts are important, and how they're a 2-way street... once you get past the annoying intro...

    also this... a gazillion times... friends and family tend to expect you to perform miracles, in silly-short time frames, often for nothing [or close to it]...

    sod that, i'm not a charity... if they want my time/skills they can pay for them like everyone else...
     
    Last edited: 8 Jul 2013

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