Can I Face Legal Trouble for Backing Out After Signing an Employment Contract?

Recently, I got an offer from a company. During the recruitment process, they sent me a document named "Employment Contract cum Appointment Letter" where they mentioned the salary structure and terms and conditions and asked me to send them a signed copy, which I did. Later, I changed my mind and informed them that I couldn't join due to personal issues. They responded that they would proceed legally. Will this really impact me?

Dear member,

Generally, when a candidate is selected to fill a particular vacancy, he or she is issued an "Offer Letter." In this letter, basic details like the date of joining, place of joining, salary break-up, etc., are mentioned. When the candidate actually joins the company, an "Appointment Letter" is issued. This letter contains the terms and conditions of employment. The "Appointment Letter" is a proper contract under the provisions of the Indian Contract Act, 1872.

However, not every company follows this process. Some companies directly issue the "Appointment Letter" once a candidate is selected. In your case, this is what has occurred.

Though you have been offered the position, you have not provided details regarding the pre-employment and post-employment terms and conditions. Has the company specified conditions for revocation of the offer by either party during the pre-employment phase?

Therefore, I recommend that you upload the terms and conditions of employment, particularly during the pre-employment phase. Suggestions regarding the revocation of the appointment can only be given once these details are known.

If you wish to seek legal advice, please consult a lawyer experienced in matters pertaining to the Indian Contract Act, 1872. A regular labor lawyer may not be the most suitable person for advice in this situation.

Nevertheless, an issue has arisen due to your hesitation. While we are not aware of the exact reasons for the withdrawal from the employment contract, the sudden emergence of personal issues shortly after the contract was signed is perplexing. As this is a personal matter, we cannot provide extensive commentary, but it brings to mind a Latin phrase, "quod cito fit, cito perit."

Thanks,

Dinesh Divekar

Here are the terms and conditions of the contract. I haven't seen any terms on the revocation of the contract before the joining date.

Dear member,

You have uploaded the contents of paragraphs 1, 6, and 7 of the "Contract-cum-Appointment Letter." The clauses mentioned in each paragraph are applicable to the "employees." However, in your case, the employer-employee relationship is yet to be formed. You will become an "employee" of that company when you report for duties on 01-Sep-2021. However, as you are not an employee as of today, the terms and conditions mentioned are not applicable. Therefore, you are free to revoke the offer.

What about the other paragraphs of the contract letter?

Have they mentioned anything on the revocation of the offer by either party? Please check and re-check other paragraphs to see if anything binds you to join them.

Recommendation on Revocation of the Offer:

There could be flaws in the contract agreement, and you could find a loophole to revoke the offer; however, I strongly recommend refraining from doing so. To fill one vacancy in the company, many people have to work at the backend. Revocation could vanish their efforts into thin air, and they would have to start afresh. In life, whether professional or personal, we should live by the principle "dictum meum pactum." Betrayal or letting someone down is not a one-way street. The roles could change, and in the future, you could be at the receiving end!

Thanks,

Dinesh Divekar

I am in total agreement with the views and points explained by Mr. Dinesh Divekar. The mere consent to the Expression of Interest (EOI) as an "Employment contract cum Appointment letter" in your case does not mandate the compulsory performance of the contract. The contract shall be effective from September 1, 2021, upon joining the services pursuant to the offer letter ("Employment contract cum Appointment letter"). Reasonable advance intimation in your case to withdraw from the proposal is fairly sufficient before the start of the contract.