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I signed a contract with a company I found quite interesting, however, another company I had applied to earlier finally responded. I prefer the latter. The contract I have signed states that both employer and employee can terminate the contract within the first month without giving a reason. If I decide to go with the second company, which seems to be the thing I will do, should I already inform the first company that I am 'breaking' the contract, or should I wait until the first day and resign then? The contract does not stipulate anything about breaking it before it even begins. Or should I instead ask the HR department of the first company what they would prefer and what the procedure is?

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    In the future, I would wait for all parties to reply. No matter if some company is late and others are pushing. If you communicate the situation clearly to all parties most of the time all understand and willing to help. If some company doesn't reply give them last day when you will make your decision or even why bother with a company that doesn't communicate well. May 26 at 8:44
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    @WillyWonka are you absolutely certain you have the 2nd job? You have a firm written etc. offer from them?
    – Fattie
    May 26 at 14:32
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    I have never been in OP's situation, but I have had offers withdrawn. It is not fun. OP should think about what the company would do if it no longer made business sense to hire OP.
    – emory
    May 27 at 0:01
  • Or just do "the right thing" and let them know you've changed your mind, maybe they have a second-best candidate who's still available (but may not be available for long).
    – obe
    May 27 at 20:28
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If you are certain that you are going to quit, tell the first company immediately. It is annoying when a candidate backs out after accepting a position. If you let them know immediately, you can mitigate that annoyance by allowing them to potentially offer the job to their second-choice candidate before that candidate accepts a different position. And you save them the expense of doing all your on-boarding paperwork only to quit on the first day.

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    This; regardless of how quitting before you start will be seen, at least doing it early will leave company A with time to recruit another person
    – ThisIsMe
    May 26 at 9:44
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    Emphasis on certain. If you have not yet signed anything with the second company, wait until you have. Until you have a signed contract in hand, do not take anything for granted. May 26 at 17:25
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    Imagine shutting down your interview pipeline, rejecting multiple other promising candidates, & waiting around for their start date in 1 months' time. Then, making time to make sure your onboarding material is up-to-date, scheduling introductions with key teams members, etc, only to have the person turn up on their first day with a resignation letter saying "but my contract says I can leave at any time with no notice"! Definitely tell the company ASAP once you know you're not taking the position. May 27 at 10:27
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You should definitly notify them as soon as possible. They probably won't like it, but the longer you wait, the worse it will get, especially if they find out you knew about it way before you told them. And as Justin Cave said in his answer, notifying them ASAP will also allow them to reach out to the other applicants still, instead of having to start all over again.

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While the other answers are coming from the employer's perspective, this will be answer from the employee's perspective.

Ethically, you should inform the first company as soon as possible about your quitting, but you should only do that after you get your employment confirmation (i.e., signing an employment contract) from the second company.

While it is bad to break a promise (or in this case, a contract), your focus should be on finding the best possible fit for your own career advancement. Remember, the company can choose from tens/hundreds of candidates, while you can only choose from one or two opportunities. They may be wasting some resources, but you are wasting your future.

Depending on where you are from or the terms of the contract, the company may sue you for breaking the contract, but practically that won't be done because it's not worth the resources just to screw you up for such a trivial issue. Besides, the contract stated that you can quit within one month from commencement without reason. They are prepared to lose you.

When rejecting the first company, be nice and nicely apologise. Most of the time, the HR is already used to this kind of situations. Even if they don't response positively, just remember that they have every right to.

EDIT

You mentioned the contract states you can terminate the contract without reason within the first month. They are effectively saying you can cancel the contract anytime as long as it's before the second month since commencement.

If you're worry because the contract did not say anything about cancelling before commencement, don't worry about it because it doesn't make sense that you cannot cancel until you start. So feel comfortable to just tell them.

If they do have a problem with you cancelling before you starting, then just terminate it on your first day.

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    slight nit: judging by the OP, it's wrong to call it "breaking a contract"/promise, since it explicitly allows terminating it without reason in the first month. So in a "best kind of correct" way nothing explicit is being broken here.
    – Dan M.
    May 27 at 14:58
  • @DanM. The question is tagged with the Netherlands, so I'll just add a Dutch perspective: A month-long probation period is pretty standard (as well as the legal maximum for contracts up to two years; longer or permanent contracts allow up to two months probation). Getting rid of an employee later on is extremely difficult, so if you don't terminate someone during probation, you're pretty much stuck with them until they resign on their own.
    – TooTea
    May 27 at 19:17
  • @TooTea out of curiosity, is it illegal to fire people in the Netherlands if you're not satisfied with their performance?
    – obe
    May 27 at 20:31
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    @obe Not illegal but as I said, "extremely difficult". You need to get a permission to fire someone from a dedicated worker protection agency (UWV, for redundancies/layoffs for serious economic reasons) or from a local court (unsatisfactory performance, irreparable harm to work relations, …). You'll thus have to convince the authorities that you have a good enough reason and that you have exhausted all other options. You can imagine that just collecting solid evidence that someone is severely underperforming is a whole lot of work, so it's often cheaper to just put up with the employee.
    – TooTea
    May 27 at 21:37
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    @obe Yeah, it's a core part of Dutch labor law, so I doubt there are any exceptions. Actually, it's not that bad in practice, because what everyone does is to give a new employee a fixed term contract for one or two years first, which serves as a sort of extended probation period. Afterwards, you either give the employee a permanent contract or you let them go without any extra paperwork. I don't have much of an idea how long the termination takes, because it's really the very last resort so it's used very infrequently. Most of the time you strive to end the employment by mutual consent.
    – TooTea
    May 28 at 6:57

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