Are there any legal terms to use for charging the client for downtime hours at reduced full-time rate?

Question

Normally, when working as a contractor, the bench time — when the client fails to provide you with the work to do, and no explicit work hours were assigned, either — is not compensated.

This could be an issue with some clients reserving you for their projects, and then not giving you any work when you reasonably expect to perform the work (this in the context of software engineering, where delays on the part of the client are plentiful).

This would especially be an issue if no explicit timeline was provided by the client — e.g., 60 hours until 3 weeks from date of signing — nor do you prefer to work within the timeline of the client, so, the only way you'd be able to charge them is if it would have been reasonable for you to believe that you were supposed to receive some work and/or be capable to start on day X, yet no work was provided, and such language was to have been in the contract.

What would be some good legal terms to use in order to specify in the contract that it won't be tolerated, and you'll be charging half the regular rate if they don't use you during the time that you expect to be working?

For example, I was thinking about writing something like below, using the term "discount bench rate", which, in my opinion, is 100% clear and accurately describes what I intend to say, however, to my surprise, an internet search didn't reveal a single hit for "discount bench rate", so, I'm not sure whether or not the terms would be understood by the customer and/or their legal, nor whether it sounds really strange and unprofessional.

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• The base rate is XYZ USD per hour.

• The discount bench rate is between 0.25× and 0.5×, limited to 8 full-time hours per day (2 to 4 full-time hours after the discount), and applies at the sole discretion of the contractor to grossly mismanaged projects and/or to continued delays on the intake of the contractor.

  • The client will be notified of the discount no later than 14:00 US/Central on, or before, the day for which it is applied.

  • The clock would start at the latest of: (1), time of notification, (2), 10:00 US/Central on the day of the application.

  • Consideration for bench time cannot be denied even if the contract has to be cancelled by the contractor without providing any of the services for which they were originally procured.

Answer 1

Are there any legal terms to use for charging the client for downtime hours at reduced full-time rate?

You can find the legal definition of demurrage in Black's Law Dictionary. Unless you are confident that certain term fits the purposes of your contract, your best option is to formulate in your contract a clear definition of "bench time", "discount bench rate", and of any other terms as you deem pertinent.

Indeed, it is common for contracts and legislation/statutes to include a section for definitions of terms where their intended meaning are narrower than, or depart from, the ordinary meaning of those words.

That being said, the clause you reproduced is likely to work to your detriment due to the doctrine of contra proferentem. For instance, you are inadvertently constraining your sole discretion with the language that discount bench rate

applies at the sole discretion of the contractor to grossly mismanaged projects and/or to continued delays on the intake of the contractor.

This language essentially conditions your discretion to [proving] the occurrence of client's gross mismanagement and of "continued delays on the intake of the contractor".

Furthermore, although you include the connective "and/or", contra proferentem affords the non-draftsman to choose between "and" and "or". A client will seek to minimize liabilities and thus opt for the connective "and", whence you will have to prove both conditions: gross mismanagement, and continued delays. It altogether significantly constrains what you intended to be your sole discretion.

Also, it is unclear what you mean by

Consideration for bench time cannot be denied even if the contract has to be cancelled by the contractor without providing any of the services for which they were originally procured.

I am not suggesting you to hire an attorney. Instead, my point is that it is in your best interest to be clear and very specific so as to preclude the application of contra proferentem.

If you end up hiring an attorney, though, make sure that he does not introduce illegal clauses (as it purportedly happened to my former employer until I realized the contract he made me sign was in violation of MCL 408.483a).

Answer 2

The term you want is Demurrage