Can an Independent Contractor Recover Wages for Breach of Contract?

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Breaches of contract can result in legal remedies.
Breaches of contract can result in legal remedies. (Image: Jupiterimages/liquidlibrary/Getty Images)

Independent contractors can feel vulnerable about putting all of their eggs in one basket when they work primarily for one client. In some cases, independent contractors function much like employees, only without the benefits, job security and labor law protection. That's why when things go wrong in a client-contractor relationship, it can result legal disputes. Independent contractors with detailed and clear contracts may have recourse under certain situations.

Contract Terms

The terms of your contract are the most important factor in determining whether you're entitled to compensation for a breach of contract. Some contracts have express penalties and terms for remediation. Others leave consequences of a breach vague. Read yours over carefully and perhaps with an attorney.

Project Termination

If you a company contracts you for a specific project or period and you have turned down other opportunities because of your promise to your client, then you have a strong case. You may be able to argue that the client compromised your living when they terminated a project without warning or did not uphold its end of the work to make the project's success possible. They key is that through the other party's actions, you are without work that you could have had.

Loss

Although there are a maze of laws in various states and jurisdictions that address contracts and independent contractor relationships, a basic tenet of contract law is that you can only sue for loss or damages. If your client's failed to pay you what you earned, that's a loss for which you can sue. If you passed up other opportunities for your client's work, then you lost potential revenue. However, if your client simply terminated the contract and you have no termination penalties delineated, you may not have lost anything. You can't usually sue for wages you didn't earn through work.

Labor Violations

Federal labor law and court decisions give guidelines on the use of independent contractors. Companies are not supposed to use independent contractors in a way that essentially mirrors that of a full-time employee. Using contractors long term for employee-type work can be viewed as exploitation in that a company essentially has an employee isn't entitled to benefits or labor law protections. If your client used your services in this way and then breached your contract, you may have a lawsuit and labor claim. Contact a labor attorney or your state department of labor for advice.

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