Contract Breach

[fingwong]

Hi All

Im a newbie to the forum, but an experienced contractor so I hope that someone can help with an issue Ive never seen before.

Very recently I began a new 6 month contract with a firm I had never dealt with before, and with an agency I had never dealt with before. The contract was good and looked like a good opportunity for me to progress my career.

The client site was a decent length commute, but I was willing to do this based on the daily rate negotiated etc.

I went to the client for the first two days noting the length of the commute time wise, and trying to guage whether this was going to be acceptable for me. On the second night of me commuting home a personal issue at home made me realise that over the next few weeks I would need to be at least closer to home, if not at home and that the commute was going to be an issue for me to complete.

For this reason I emailed the client direct, explaining that having had this issue arise, it had compounded my fears that the commute was probably going to be too long for me to continue with, at least in the short term. I received nothing back.

I have now received an email letter from the agency, stating that as the contract had no option to terminate, I was in breach of contract. For this reason the agency would now be out of pocket to the tune of £5.5k, as well as damaging their reputation with the client.

They have now demanded that I pay them £6k + VAT as a full and final settlement.

1) Firstly, in the contract they are right, there is no notice period on my part, however, what would happen if I die?? Would this bill be taken accross as a burden to my family??
2) Nowhere in the contract does it mention that I would need to pay these fees should I be unable to continue the employment
3) I have a copy of the contract in front of me, signed just by me, no-one from the agency, does this make it null and void?
4) Do these contracts usually carry a cooling off period? I know most are around 14 days, but isnt it general terms that allow anyone to have a cooling off period? I would be within this period if thats the case?

Any ideas anyone, as this is a new one on me.

Thanks
Nick

[northernladuk]

Hi All

The client site was a decent length commute, but I was willing to do this based on the daily rate negotiated etc.

It seems not.

I went to the client for the first two days noting the length of the commute time wise, and trying to guage whether this was going to be acceptable for me.

Why didn't you do this before you started? You can't pick and choose what you fancy after you have signed and started. I was getting a feeling where this was going as soon as you said this.

For this reason I emailed the client direct, explaining that having had this issue arise, it had compounded my fears that the commute was probably going to be too long for me to continue with, at least in the short term. I received nothing back.

Because your contract is with the agent. Blimey, you are a one aint ya. Funny feeling is growning. Wondering if you are gonna get both barrels here. Wouldn't be too unfair.

I have now received an email letter from the agency, stating that as the contract had no option to terminate,

<cough> right of substitution <cough>

I was in breach of contract. For this reason the agency would now be out of pocket to the tune of £5.5k, as well as damaging their reputation with the client.

They have now demanded that I pay them £6k + VAT as a full and final settlement.

Seems fair.

1) Firstly, in the contract they are right, there is no notice period on my part, however, what would happen if I die?? Would this bill be taken accross as a burden to my family??

Now you are being a moron. That is something completely different... and I bet it isn't unheard of!

2) Nowhere in the contract does it mention that I would need to pay these fees should I be unable to continue the employment

I would have thought being in a contract you can't terminate he could charge you the full revenue lost over the entire contract?

3) I have a copy of the contract in front of me, signed just by me, no-one from the agency, does this make it null and void?

You turned up and worked. That is acceptance of the last contract you saw. Period.

4) Do these contracts usually carry a cooling off period? I know most are around 14 days, but isnt it general terms that allow anyone to have a cooling off period? I would be within this period if thats the case?

Sigh... Yeah so we can all screw agents and clients over to suit ourselves. Get a grip. It is situations just like this that makes absolutely sure there are no cooling off periods.

I would open dialog with the agent to see if you can come to some arrangement which is pretty unlikely. I would then sit back and wait to see if he follows it through. To get his money he will have to get a lawyer which isn't going to be cheap. I don't think he would do this for the sake of £5k unless you have REALLY pissed him off and he is after your skin just for payback let alone the cash. Hopefully for you he will throw a lot of tulipty letters and threats and then it will die down as he doesn't have the time or the cash to start legal action.

If he does leave it alone you got away with this one lightly IMO. Very poor carry on.

[fingwong]

Hi All

Thanks for the reply. I do see where you're coming from and and I totally see the point you have raised. The decision from my perspective, was go to work or deal with a potential of my wife loosing her sight!! I definitely know which one is more important to me.

As a point of fulfilling my contractual duties, i returned to the client location the very next day, explained the situation and was advised that because of my actions the position was going to be re-advertised. Which is fair enough. During my visit, I advised the client that i had never breached a contract before, and for this reason I would remain professional and if required would fulfil my side of the contract willingly if they wanted me to.

You can guess the answer, they advised me that, that ship had sailed. This from a personal perspective is ok as I need to really be with my wife or at least close by in the short term. From a professional perspective, I know my reputation is tarred with the agency, but I did travel over 50 miles to try and make amends with the client, and look the guy eye to eye to try and resolve the issue. Any thoughts on this?

I have been advised the same as you mentioned, that they may huff and puff, but might not pursue due to time and efforts involved in going down that route. We will just have to see what happens, my legal department have been informed so

I can honestly say this is not something I usually do, so for all that say Bad Form, I agree, but dire circumstances on my part have caused this, not trying to be unprofessional.

[AussieDigger]

I would suggest probably what you should have done was consulted with the agency first and explained your circumstances so they could provide options and then approach the client.

They probably see all sorts of excuses and reasons why people back out of contracts and the client probably has too. Given the client doesn't know you they probably assumed it was you just not wanting to be there.

An unfortunate situation to learn from I guess.

I wouldn't give the agency any money but rather offer a substitution resource or work until a new resource is found. That number they've quoted you would probably be their finders fee from the client which they won't get a second time around so they have to re-hire for free, which won't make them happy. I'd make them chase you on it as it will cost them more to pursue that on a contract breach basis than it will to actually just get on with things. I'd respond to their breach letter claiming you didn't breach the contract (as you turned up for work the next day) but exceptional circumstances meant you could no longer complete the contract. Go google 'frustration of contract' and do some light reading. Perhaps go get "Contract Law in a Nutshell" from Amazon...a good read for those not wanting to be lawyers but wanting to know the basics of contract law before, during and after you sign.

This is where it does help to have a little knowledge of contract law to know what the right steps are.

[Sockpuppet]

Hi All

Thanks for the reply. I do see where you're coming from and and I totally see the point you have raised. The decision from my perspective, was go to work or deal with a potential of my wife loosing her sight!! I definitely know which one is more important to me.

As a point of fulfilling my contractual duties, i returned to the client location the very next day, explained the situation and was advised that because of my actions the position was going to be re-advertised. Which is fair enough. During my visit, I advised the client that i had never breached a contract before, and for this reason I would remain professional and if required would fulfil my side of the contract willingly if they wanted me to.

You can guess the answer, they advised me that, that ship had sailed. This from a personal perspective is ok as I need to really be with my wife or at least close by in the short term. From a professional perspective, I know my reputation is tarred with the agency, but I did travel over 50 miles to try and make amends with the client, and look the guy eye to eye to try and resolve the issue. Any thoughts on this?

I have been advised the same as you mentioned, that they may huff and puff, but might not pursue due to time and efforts involved in going down that route. We will just have to see what happens, my legal department have been informed so

I can honestly say this is not something I usually do, so for all that say Bad Form, I agree, but dire circumstances on my part have caused this, not trying to be unprofessional.

50 miles? If your wife having sight is as important as you say then surely that £6K is a small price to pay.

I can guarantee that there is another way for your wife to have her sight saved that doesn't require you to be in a x mile radius and if on contractor rates you could even pay for someone to help with this and still come out on top. You signed a contract and you have to live by it, tulip but the way it works.

[d000hg]

• Have you formally told them you won't continue work?
• Have you missed any days on-site yet?
• NL is being a bit of a toss-pot about it but his advice sounds sound, you might look at finding a substitute* for either you to hire, or to pass on to the agent.
• Can you carry on working the next few days while you figure this out... tell agent you spoke rashly? Maybe find a hotel/B&B for a few days and decide what to do?
• Can you do such a bad job the client terminates you?

*in which case what is the role?

[northernladuk]

NL is being a bit of a toss-pot about it but his advice sounds sound,

Oi!! Leave it!!

IMO OP has been a toss-pot so seemed reasonable and was just bit of fun.

Anyway.. I am a toss-pot so nothing wrong with my response..

[thunderlizard]

I would have thought being in a contract you can't terminate he could charge you the full revenue lost over the entire contract?

That's quite an assumption, and one that would need to be checked in the contract. Lots of contracts require you to reimburse the client (i.e. the agency here) for losses: but "we failed to make an expected profit of £5.5k" is not the same as "we made a loss of £5.5k".

[PSK]

The following is not legal advice and you should not rely on it. Sorry for the long post.

I am sorry for the circumstances you find yourself in. I hope your wife recovers.

Please find some thoughts regarding your questions (with a suggestion that depends on whether the agent places your replacement) then a suggestion concerning whether you are in breach. Regarding your questions,

1) Firstly, in the contract they are right, there is no notice period on my part, however, what would happen if I die?? Would this bill be taken accross as a burden to my family??

These aren't the circumstances you are in. Depending on the nature of your firm's contract (are you contracting through a firm?) it's not certain whether your contract would be frustrated or whether your firm would be liable. Aside from the legals is then the question whether the agency would take the commercial decision to enforce any rights it had.

2) Nowhere in the contract does it mention that I would need to pay these fees should I be unable to continue the employment.

Not all contractual rights in a contract need to be identified with a corresponding remedy. If the contract is silent, the agency may be starting negotiations. If the client sources another contractor from a different agent (you've not said whether the agent is on a multi-agent roster or a sole agency) then the fees the agent would have earned over the life of the contract might in some circumstances be viewed as reasonable. If the agent places your replacement then, again if the contract is silent and depending on circumstances, it might not be reasonable for the agents to earn two sets of commission for the one role (one from you in damages and one from the client for the replacement) and the 'costs' might be argued to be the 'administrative' costs in the work to secure the new contractor and possibly any increased rate they've got to pay to secure the same caliber of contractor. If they earn their commission on placing the second agent and the contract is silent, I'd certainly want a discussion with them about them going after you for their 'missed' commission. If they don't place your replacement then you might want to think or argue whether you are likely to have worked the full duration of the contract - if your client tends to terminate early then this could reduce the likely fees the agent would have earned.

3) I have a copy of the contract in front of me, signed just by me, no-one from the agency, does this make it null and void?

Many contracts won't need two signatures anyway unless it was written that way to require it. If you turned up and started work then it might be that acceptance may not be a helpful avenue for you.

4) Do these contracts usually carry a cooling off period? I know most are around 14 days, but isnt it general terms that allow anyone to have a cooling off period? I would be within this period if thats the case?

In commercial, non-consumer contracts then I've not come across the requirement for a cooling off period for our kind of work before.

Good for you in thinking through some potential avenues.


In my experience, some agents are struggling for £ so their threats might be more likely to be taken forward than in happier times.

I've reread what you said and, depending on what you put in your email, I wonder whether another avenue to explore would be based on "For this reason I emailed the client direct, explaining that having had this issue arise, it had compounded my fears that the commute was probably going to be too long for me to continue with, at least in the short term. I received nothing back. "

I'm trying to stretch things and, given your circumstances, putting any morality aside about standing by your agreement. Depending on what you actually wrote, it might reasonable to argue this was not a notice of termination from you putting you in breach but rather a communication to inform your client of your circumstances, discuss things, ways of working, what changes might be available and such like. If you could reasonably argue that then you might be in a happier position and, in practice the client might be viewed as having terminated your contract using their provision. I'm not saying this is the case as it will stand on what your communications said. To protect your position, you might want to deny any of the telephone conversations if you said anything that makes this untenable and review what you've posted here or elsewhere. At best, you might not be on the hook for the agency's commission and you might be due your two days' worked fees. If contracts aren't your thing and if £6k is a significant amout of money to you, you might be better having a solicitor read what emails you sent and drafting the letter to send to the agency and client.

As with many legal things, it may stand or fall on exactly what is in the various contracts and what was said. As I said, this is not legal advice and you should not rely on it.

Good luck.

[Wanderer]

They have now demanded that I pay them £6k + VAT as a full and final settlement.

They are real comedians, aren't they. They can't enforce this against you, they are just trying it on. Even if it's written in the contract a penalty in a civil contract is very, very rarely enforceable. They would get laughed out of court and they know it.

Send them an invoice for the days worked and threaten THEM with legal action if they don't pay, that will put the wind up them. I wouldn't take it too much further though considering you failed to perform the contract...

Put it down to experience and move on.

Oh, and welcome to the forum by the way!