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Law Girl
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Category: Business Law
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Termination of Agreement

Customer Question

Termination of Agreement                                        & nbsp;                I have a computer consulting company who is contracting to another company to help with their computer software. There are two signed documents, a Consulting Agreement and a Work Order. Concerning termination, the agreement states the following: "This agreement shall take effect on the Effective Date and remain effect until December 31, 2008 or until terminated as provided herein, whichever first occurs. A Work Order shall terminate upon acceptance by Chemtura of the Services for such Work Order, unless earlier terminated hereunder. Either Consultant or Company may terminate this Agreement, without cause and without penalty, upon 30 days prior written notice to the other Party. Any outstanding Work Orders issue for Services shall terminate upon termination of this agreement." Can they cancel the work order without notice and not have to pay a 30 day notice or does the 30 days not cover the Work Order?
Submitted: 9 years ago.
Category: Business Law
Expert:  Law Girl replied 9 years ago.


Thank you for your question.

The 30 day notice is to terminate the Agreement and not the Work Order. However, any Work Orders in effect at the termination of the Agreement will also terminate. So, you stand not to be paid on any outstanding Work Orders that remain open at the time the Agreement terminates.

It looks like the only way to terminate a Work Order is by (1) acceptance and/or (2) termination of the Agreement. (Of course this does not account for any other part of the agreement that may take into account or allow for termination of a Work Order.) So, it does not appear that the Work Order can be terminated without notice because the only way the Work Order can be terminated apart from acceptance (in which case you would have notice) is termination of the Agreement (which also has 30 days notice).

Please let me know if you have any other questions, or require clarification of this matter. Otherwise please hit "ACCEPT", so I may receive credit for my response. Tips and feedback are also appreciated.

Good Luck!


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Customer: replied 9 years ago.
Reply to Law Girl's Post: My question isn't really about oustanding Work Orders at time of termination but do they, according to this agreement, have to give me a 30 day "paid" notice before they can terminate the agreement.
Expert:  Law Girl replied 9 years ago.

It does not appear that they need to "pay" to give you notice. You would still be entitled to payment under the Agreement until the Agreement finally terminates; however, they do not need to "pay" to give you notice. If you are paid monthly or weekly, you would merely be entitled to your regular payment(s) during the last 30 days of the contract.

I hope that provides clarification. If it does not, then please let me know and I will be happy to provide an alternative explanation.


Customer: replied 9 years ago.
I'm probably not making my point clear and I apologize. I am paid by the hour and submit on a monthly basis based on time worked. My Work Order states that I will bill no more than 40 hours unless agreed upon beforehand.

Can they give me a 30 day notice and then turn around and say, "We have nothing for you to do so we're not going to pay you anything for the 30 days notice."

Or am I entitled to 40 hours per week for that 30 days if I am making myself available for anything they need help with. I just want to make sure they can't say we're giving you notice but we have nothing for you to do so we're not going to pay you.
Expert:  Law Girl replied 9 years ago.

The agreement does not say one way or the other, so I would assume that you would be entitled to payment weekly for each Work Order as the contract would still be in force for the 30 day notice period.

However, nothing prevents you from adding this specificity to the contract, as long as both parties agree.