Breach of Contract argument - Loss of Commission invoice from agent
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  1. #1

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    Question Breach of Contract argument - Loss of Commission invoice from agent

    I've read a lot of posts on here, looking to answer the question myself but have been unable to find a similar situation. Please don't flame me as I have tried, honest.

    I've been in a contract with an "offshore consultancy" for over a year, have been through 2 renewals, yet am feeling underappreciated, underworked and undervalued. Working conditions keep changing and despite my desire for extra challenges, I'm feeling ignored. Nothing terrible, just would like a bit more to do. I started looking around about 4-5 months ago and I was recently offered an alternative contract with a public sector client, which seemed promising, so I duly tendered my resignation (professionally, with the appropriate notice and assurance that I'd hand over properly), signed the new contract and booked a hotel for my new gig. My offshore client panicked and begged me to stay but I told them the problems and why I wanted to resign.

    In the meantime, the new client and agency didn't fulfil the terms of the new contract. Two days before I was due to start, having already travelled up to the client premises once to deliver copies of my passport and the like, I felt I had to pull out as I had no accurate job description, had been contacted about attending onboarding sessions before the agreed start date (with no promise of remuneration and while I was currently working my notice for my current client), and had no joining instructions, despite asking for clarification several times and receiving assurance that this would be chased by the agent. I don't see how I could meet the "technical competence" requirements of the contract without being told what they were.

    The agent was livid (understandably) and has now sent me an invoice for loss of commission over the entire planned length of the contract (about 5 months), in short over £5k.

    There was a 2week/2week notice period on the new contract but they are seeking full recovery of their "losses" as I had breached the contract. I replied saying they had breached the contract but even if they hadn't, I had a 2 week notice period and their commission would be about the same as my incurred expenses so it feels fair to write it off on both sides.

    On the plus side, my offshore client managed to hastily arrange a new contract so I have been able to stay with them. I do feel remorseful about this whole situation.

    Now, the new agency is threatening to go legal if I don't pay up. Oh, and if I don't pay up, they'll never to speak to me again. And they might add on other unexplained charges that they consider they might incur as a result of a tarnished reputation. Although if I do pay, they will forget about all that (can anyone say extortion?).

    What are the chances they will follow through with their threat? (I would gladly state my case in court, tbh.) Anyone else had this vindictive, personal behaviour from agents? Should I have even replied to their threats? I can't pretend to be unperturbed - I'm losing a lot of sleep over this.

  2. #2

    Respect my authoritah!

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    IANAL, but in my opinion the agency haven't breached your contract. The client can't breach your contract as they don't have a contract with you. Your pre-contract expenses are your pre-contract expenses. All part of the risk and cost of being in business.

    The agency can only claim actual damages incurred - and due to the notice period, that's two week's commission. The tarnished reputation stuff is just bluster. Contracts get frustrated - end of. They'd have ditched you in a second and bad-mouthed you to the client if it suited them.

    Never talking to them again can only be a plus, surely? It's not like they're related to you or you've had a deep friendship with them for twenty years.

    Threatening to counter-sue for breach of contract, even if you don't have a leg to stand on, can muddy the waters nicely. But really, you should only respond to these people through a lawyer from now on.

    Offer them 2 weeks commission (£500?) as full and final settlement, and move on.

    One thing puzzles me though. £5000 commission over five months works out at £20 a day. That's extremely low - one might say even unviable.
    --drunk on abuse of power--

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    Quote Originally Posted by ITDJ View Post
    In the meantime, the new client and agency didn't fulfil the terms of the new contract. Two days before I was due to start, having already travelled up to the client premises once to deliver copies of my passport and the like, I felt I had to pull out as I had no accurate job description, had been contacted about attending onboarding sessions before the agreed start date (with no promise of remuneration and while I was currently working my notice for my current client), and had no joining instructions, despite asking for clarification several times and receiving assurance that this would be chased by the agent. I don't see how I could meet the "technical competence" requirements of the contract without being told what they were.
    That is the normal these days.

    You owe them notice period for 2 weeks.

    IMO ignore them. They will get bored and go away.

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    Respect my authoritah!

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    They also have to mitigate their losses. If they get a replacement in a week later, then you only owe them £250. They can't just kick back and expect you to pay them.
    --drunk on abuse of power--

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    Nervous Newbie


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    Quote Originally Posted by NotAllThere View Post
    IANAL, but in my opinion the agency haven't breached your contract. The client can't breach your contract as they don't have a contract with you. Your pre-contract expenses are your pre-contract expenses. All part of the risk and cost of being in business.
    ...

    One thing puzzles me though. £5000 commission over five months works out at £20 a day. That's extremely low - one might say even unviable.
    I had the reasoning that it was the agent that passed on the demand to attend onboarding prior to the agreed start date. This, to me, is unreasonable, as they knew I was still working for someone else.

    I replied saying I was confused and pointed out their mistake. They promised to get back to me after speaking with the client. I reminded them a week later that I still hadn't heard and they confirmed they would chase. Then... nothing for a further 8 days. Duly, I asked to rescind my signature, given that the expectations of the client were unreasonable and they had not respected the terms of the agreement. For me, that is breach of contract on their part, with sufficient warning to remedy. However, I take your point about expenses. I would have swallowed them if they hadn't threatened me with unfounded accusations and what seems like "blackmail."

    As far as commission figures, it's about £40 per working day. This is likely due to the fact that they are a big agency, with a good number of contractors working for the same client. Their margins are probably capped (but are rapidly multiplicative with the number of bodies onsite). This is one of the reasons that I feel hurt by their threats - I may never get a chance with this client again. Having said that, they approached me as I'm a niche contractor with good skills in a difficult subject.

  6. #6

    I live on CUK

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    Quote Originally Posted by ITDJ View Post

    In the meantime, the new client and agency didn't fulfil the terms of the new contract. Two days before I was due to start, having already travelled up to the client premises once to deliver copies of my passport and the like, I felt I had to pull out as I had no accurate job description, had been contacted about attending onboarding sessions before the agreed start date (with no promise of remuneration and while I was currently working my notice for my current client), and had no joining instructions, despite asking for clarification several times and receiving assurance that this would be chased by the agent. I don't see how I could meet the "technical competence" requirements of the contract without being told what they were.
    Did you raise your concerns in writing AND tell them if these weren't resolved you would have to leave?

    if you did, then resend the email and tell them to go away.

    And if you didn't next time make sure you send them an email even if it is to mention you raised your concerns in a phone call you raised earlier.
    "You’re just a bad memory who doesn’t know when to go away" JR

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    Default Email trail

    Yes, I have plenty of emails and it's all there in black and white (electrons).

    There were some things said on the phone but I always confirm the salient points in writing.

  8. #8

    Respect my authoritah!

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    Quote Originally Posted by ITDJ View Post
    ...For me, that is breach of contract on their part...
    If that's you're opinion act on it.

    You need to understand that there are different types of contract breach. There can be a minor breach, a material breach or a fundamental breach. Your breach is fundamental. In my view, there's is not - it doesn't prevent the contract being fulfilled, it just pissed you off, and made you lose confidence.

    On that basis, I still think you're on a hiding to nothing if you try to claim they breached first.
    --drunk on abuse of power--

  9. #9

    Should post faster


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    I wouldn't pay them anything.

    Legally, as NAT says, they'd could only sue you for actual losses, which they'll have to prove, and they'll also have to show that they've tried to mitigate these losses and this only really has merit if they fail to place the next candidate, as if they do, presumably being a contract with a fixed amount and term of work, they have incurred no loss, just delayed gratification.

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    Ddraig Goch


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    Having a laugh. No chance this will ever go legal.

    Agent trying it on / trying to be funny.
    Rhyddid i lofnod psychocandy!!!!

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