Problem: Customer cancelled and no longer responding
After finishing a job for a customer in August 2018, I was subsequently asked for a price to decorate a living room.
Via Facebook Messenger, I sent the customer a quote in the second week of September and got a reply a few weeks later saying that she wants to go ahead and asking me to do the work in mid-November. I sent a message the following morning with some dates that I could start and got a reply that evening: the job was booked to start on 19 November. A week before I was due to start, I sent a message to the customer giving her a list of materials that she was to purchase. I received a reply back saying that she had to cancel the work. I asked if she wanted to re-book and was told yes and that she would get back to me in 5 days. After 2 weeks and no reply I sent another message chasing her up, but still no answer. A further 2 weeks went by without any response and I sent another message stating I had not heard from her, and by cancelling at such short notice, made it impossible for me to fill the space with another job and I had lost money.
Can I claim for loss of earnings?
Response: Establishing if there is a valid contract between you and your customer
It is obviously very annoying when a customer decides to ‘cancel’ work at the eleventh hour, especially when a lot of planning has been involved and other work may have been turned down in order to accommodate the now-cancelled work.
In order to consider whether you can make a claim, you must in the first instance establish that a valid contract between you and your customer has come into existence. For a contract to be valid, important elements must exist which are offer, acceptance, consideration, an intention to create legal relations, certainty and capacity.
You have made an offer to decorate a living room and that offer has been accepted, whilst the consideration is the monies you will receive in exchange for your resources. In all probability the other 3 elements will be present, and thus there is a valid contract between you and your customer for you to decorate the living room for the agreed price.
Part of the contract terms was that you would start the work in “mid-November”, and through no fault of your own this did not happen with the customer stating that she: “had to cancel the work”. At that point, the customer has wrongly repudiated the contract and you had 2 options, either to accept the repudiatory breach and bring the contract to an end [and pursue for damages] or affirm the contract. From your outline, you affirmed the contract by offering to re-book the work. However, since the customer agreed to re-book the work, by her subsequent refusal to engage with you, I would say that she has demonstrated that she has no intention to be bound by the agreement, and thus this is another repudiatory breach of contract which you can again either accept and bring the contract to an end or affirm the contract.
Assuming this time that you want to accept the repudiatory beach and bring the contract to an end, you will then be able to claim damages as a result of the repudiatory breach, and assuming that you are a sole trader, such damages can include loss of earnings, subject to proof and demonstration of mitigation of any losses.
© Michael Gerard 2019
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.