unfair business contract terms
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    Angry unfair business contract terms

    I work as a self-employed agent for a merchant services company that provides card machines for business to accept card payments from their customers. Typical contract term is 48 months.

    When I sign up a customer (merchant), this company pays me commission. Typically I have no previous relations with these business as sometimes I have to called call or arrange a meeting with the business owner and then pitch my sale.

    Finding customers and pitching the sale is very hard work. Few of my signed up customers have defaulted on their monthly payments (monthly card machine rentals) and now this company is asking me to pay back the commission they paid me based on the following clause in the contract I signed for when I agreed to work with them:

    "In the event of a Sale Reversing within the first year, [company] reserves the right to claw back any Commissions paid to the Agent (in full). [company] reserves the right to determine whether such amounts are to be deducted from any current or future amounts owed to the Agent or whether they are to be repaid in full without offset. In the event that [company] determines that the amounts are to be repaid in full without offset, such amounts are to be repaid to [company] within seven days of [company] issuing an invoice to the Agent".

    I believe this clause is unfair under the Unfair Contract Terms Act 1977. Every few months some merchants are defaulting and the list gets bigger, so the more customers I sign up the bigger my liability becomes. I need some advise please.

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    Most contractors on this forum work as IT contractors.

    Even if we weren't, only a lawyer would be able to advise you properly - most will offer your first consultation for free.

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    Quote Originally Posted by Scratch It View Post
    Most contractors on this forum work as IT contractors.

    Even if we weren't, only a lawyer would be able to advise you properly - most will offer your first consultation for free.
    +1 the only person who can give you advise will be a lawyer - but I don't believe that term is actually unfair - its standard across a few other contracts a quick google search returns and allows them to pay commission earlier than would otherwise be the case (in your case I suspect you would otherwise have to wait a year to receive it)....
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    Quote Originally Posted by eek View Post
    +1 the only person who can give you advise will be a lawyer - but I don't believe that term is actually unfair - its standard across a few other contracts a quick google search returns and allows them to pay commission earlier than would otherwise be the case (in your case I suspect you would otherwise have to wait a year to receive it)....
    You did that on purpose cause the OP did it didn't you?
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    Quote Originally Posted by MaKaVeLi View Post
    I believe this clause is unfair under the Unfair Contract Terms Act 1977. Every few months some merchants are defaulting and the list gets bigger, so the more customers I sign up the bigger my liability becomes. I need some advise please.
    UCTA imposes a statutory limit on the avoidance of civil liability through exclusion clauses in business contracts for breaches of contract, negligence, or other breaches of duty.

    I'm not sure how that would help you here.
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    I think what you should do is decline and move on to something else.

    I don't think there would be any mileage in agreeing to such a contract in the hope you resolve the inevitable claw back dispute in a court case.
    Last edited by BlasterBates; 3rd July 2017 at 11:05.
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    Quote Originally Posted by TheFaQQer View Post
    UCTA imposes a statutory limit on the avoidance of civil liability through exclusion clauses in business contracts for breaches of contract, negligence, or other breaches of duty.

    I'm not sure how that would help you here.
    Thanks for the tips .. will go through the Act in detail.

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    Quote Originally Posted by BlasterBates View Post
    I think what you should do is decline and move on to something else.

    I don't think there would be any mileage in agreeing to such a contract in the hope you resolve the inevitable claw back dispute in a court case.
    My mistake was I signed this contract 6 months ago without going into details on the terms!!! Trying to come out of it without paying the claw-backs and need to backup myself in case they take me to court. I think the court could also be more compassionate to me since I'm a small self-employed individual and they are a big company which most likely has all sorts of insurances in place...

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    Quote Originally Posted by Scratch It View Post
    Most contractors on this forum work as IT contractors.

    Even if we weren't, only a lawyer would be able to advise you properly - most will offer your first consultation for free.
    It is irrelevant what most contractors are in this forum... whether IT or sales, the Law is the same!

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    I wouldn't even imagine an arrangement that didn't have this provision. It is blindingly obvious if a sale falls through you have to give some or all of the commission back.

    It happens with recruitment agencies for example.

    I'm gobsmacked you didn't notice this in the contract you signed.
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