Canada: Information Technology Law Q&A

Q : Do Computer Casual Contractors Have Limited Responsibility?
A : In the information technology industry, individuals with valuable skills and knowledge often work as independent contractors based on a handshake and no written agreement. A very recent decision of the Ontario Court of Appeal highlights the risks to information technology companies of such arrangements¹.

The case involved a computer professional who worked as an independent contractor for a company that was in the business of providing technical support services, including services to a particular client. The company had an agreement with its client and arranged for the contractor to provide the contracted services. After a time, the client hired the contractor directly, cutting out the technical support services company, thereby losing it the profits on the services agreement.

There being no employment or other written contract with the independent contractor, the court examined common law principles of liability. The Court found that the contractor owed his former "employer" no fiduciary duty and that he had not relinquished his self-interest in order to act solely for the company. As well, the Court concluded that the information provided to him by his "employer" was not of a confidential nature.

This case illustrates that in order to minimize its risks, a business using an independent contractor should:

• Insist on a written agreement with its contractor
• Recognize that part-time key contractors may act in their own self-interest even if that does harm to the company
• Label any sensitive information provided to a contractor as "Confidential"

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.