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Is this clause reasonable?

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    Is this clause reasonable?

    Hello, I have just secured a 5 month contract as a PM. The agency has come back with a contract, I have amended most things, but this one stuck out:

    Failure by the Consultancy to adhere to any term of this Agreement shall constitute a breach of contract and shall entitle the Employment Business to claim damages from the Consultancy for any resulting loss suffered by the Employment Business which shall include but shall not be limited to loss of profit suffered by the Employment Business due to the Consultant not completing the term of this Agreement as specified in the Schedule. The Employment Business shall be entitled to deduct any resulting loss from any fees that may be due to the Consultancy from the Employment Business.

    Do you guys think this is reasonable? Nothing like this was in my last two contracts....

    #2
    Originally posted by wantacontract
    Hello, I have just secured a 5 month contract as a PM. The agency has come back with a contract, I have amended most things, but this one stuck out:

    Failure by the Consultancy to adhere to any term of this Agreement shall constitute a breach of contract and shall entitle the Employment Business to claim damages from the Consultancy for any resulting loss suffered by the Employment Business which shall include but shall not be limited to loss of profit suffered by the Employment Business due to the Consultant not completing the term of this Agreement as specified in the Schedule. The Employment Business shall be entitled to deduct any resulting loss from any fees that may be due to the Consultancy from the Employment Business.

    Do you guys think this is reasonable? Nothing like this was in my last two contracts....
    Just make sure you have some insurance. Basically if you **** up = they sue your ass. Its a fairly common one in projects. If your not sure that you can do the job properly then dont take it.

    Are you really going to jump ship early or otherwise break the contract? If not then you dont have anything to worry about.

    Comment


      #3
      It does sound like a valid clause and one that establishes you as a business in your own right. Good for IR35. As always, seek professional advise - such as B&C.

      Comment


        #4
        It's slanted heavily in the agencys favour, i.e. if anything goes wrong and they lose money, they can claim it back from you. That could include you becoming seriously ill, which is hardly fair. I'd definitely get B&C to check it out, but it's also potentially a good outside-IR35 pointer (evidence of financial risk).
        His heart is in the right place - shame we can't say the same about his brain...

        Comment


          #5
          yeah

          thanks for the feedback guys, I agree that its a good pointer for IR35, I am not worried about doing the job or leaving the contract early for something else....but like mordac says incase of misfortune, they can extort me for silly money....which I don't like....

          I am gonna ask them to take it out....or reword it to:

          Failure by the Consultancy to adhere to any term of this Agreement shall constitute a breach of contract and shall entitle the Employment Business to claim damages from the Consultancy for any resulting loss suffered by the Employment Business which shall be limited to loss of profit suffered by the Employment Business due to the Consultant not completing the term of this Agreement as specified in the Schedule.

          Comment


            #6
            That's what Public Liability insurance is for. You do have it don't you?
            Listen to my last album on Spotify

            Comment


              #7
              Originally posted by Cowboy Bob
              That's what Public Liability insurance is for. You do have it don't you?
              No it's not. You can't get insurance to cover you for walking out on a contract. It's your own decision to walk out, the Insurance Company will tell you to take a hike.

              tim

              Comment


                #8
                The original clause is in principle OK with the exception of the bit about them deducting the money.

                They can't just deduct the money, because they don't know how much to deduct unless they are the arbiter of the loss.

                But you don't want them to be the arbiter, you need an independent third party to do that.

                tim

                Comment


                  #9
                  Originally posted by tim123
                  The original clause is in principle OK with the exception of the bit about them deducting the money.

                  They can't just deduct the money, because they don't know how much to deduct unless they are the arbiter of the loss.

                  But you don't want them to be the arbiter, you need an independent third party to do that.

                  tim
                  I think you are right to be concerned about this and I agree its the deducting bit that needs removing and means they can withold money if you leave for whatever reason. It would then be upto you to pursue them rather the other way around. In reality agents aren't going to chase you ( ie. your Ltd ) in court as there won't be enough money available to make it worthwhile.

                  Comment


                    #10
                    so something like

                    in response to Tim123,

                    An Independent Third Party as appointed by the Consultancy and the Employment Business will assess the resulting loss from any fees that may be due to the Consultancy from the Employment Business, and award the relevant amount to the Employment Business.

                    Would be that be more fitting??

                    Comment

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