Breached notice period

[Old Greg]

It's only allowable if it is a genuine pre-estimate of the other party’s loss. (Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915]).

I read that to mean that the penalty should cover the loss of two days worth of margin rather than two days of the contractor's billing rate which is clearly excessive.

I mean, if the contractor terminated without notice would they have to pay a full month's worth of billable time? Clearly this is excessive and so is the two days. The agency are taking the piss, stand up to them and fight the bastards.

WWS. Nowhere does it appear to say that for every day the contractor does not work, they will be charged a day's fee.

[TheFaQQer]

It's only allowable if it is a genuine pre-estimate of the other party’s loss. (Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915]).

I read that to mean that the penalty should cover the loss of two days worth of margin rather than two days of the contractor's billing rate which is clearly excessive.

2 days margin
+ advertising costs to get a new person in for those days
+ admin costs
+ any client losses

I'm sure if they needed to, they could include enough add-ons to make it worth their while

[TheFaQQer]

WWS. Nowhere does it appear to say that for every day the contractor does not work, they will be charged a day's fee.

Have you seen the entire contract, or just the one clause and notes that were in the original post?

[Old Greg]

2 days margin
+ advertising costs to get a new person in for those days
+ admin costs
+ any client losses

I'm sure if they needed to, they could include enough add-ons to make it worth their while

But they won't have got anyone in to cover those days and the court will know it. They'll just start the process to get the replacement in.

[Old Greg]

Have you seen the entire contract, or just the one clause and notes that were in the original post?

I can't reveal this due to the terms of an NDA.

[psychocandy]

WWS. Nowhere does it appear to say that for every day the contractor does not work, they will be charged a day's fee.

EXACTLY. It doesnt quantify. Definitely a case of agent knowing they've got your money and thinking they can make up the rules as they go alone.

Still think that 20 days notice of not accepting an extension is unenforceable. Not a legal expert but surely this raises all sorts of unfair contract terms issues?

Surely you can't force someone to agree in advance whether they intend to enter into a contract or not? Of course, no reason why client/agent can't offer an extension 25 days before end making it clear this offer will be withdrawn in 5 days. Perfectly fair I guess.

But this sort of thing leaves the way open for client to fanny about knowing they hold all the cards and, as I said, potentially decide until day before end of contract knowing full well contractor cant leave if they dont fancy it. No way I'd agree to this sort of thing ever.



But surely its got to be client pushing this sort of thing having been burned in the past I reckon

[TheFaQQer]

EXACTLY. It doesnt quantify. Definitely a case of agent knowing they've got your money and thinking they can make up the rules as they go alone.

Have you seen the entire contract, or just the one clause and notes that were in the original post?

Still think that 20 days notice of not accepting an extension is unenforceable. Not a legal expert but surely this raises all sorts of unfair contract terms issues?

UCTA is primarily designed for consumers v business, whereby the negotiating power of one party is significantly stronger than the other. In a B2B arrangement, you'd have to show that you had no chance of negotiating the clause, which is unlikely to be successful.

Surely you can't force someone to agree in advance whether they intend to enter into a contract or not? Of course, no reason why client/agent can't offer an extension 25 days before end making it clear this offer will be withdrawn in 5 days. Perfectly fair I guess.

If you had the chance to negotiate the contract, and didn't, then that will go against you in court. If you didn't negotiate because you didn't read it properly, or take legal advice, then that will count against you.

But this sort of thing leaves the way open for client to fanny about knowing they hold all the cards and, as I said, potentially decide until day before end of contract knowing full well contractor cant leave if they dont fancy it. No way I'd agree to this sort of thing ever.

If this clause was in a contract that you were offered, what would you do? You'd negotiate it out of the contract, or walk away. You have the chance to agree a contract, so you should do that. And if you have the chance to do that, then you can't then moan that the contract term is unfair.

[northernladuk]

2 days margin
+ advertising costs to get a new person in for those days
+ admin costs
+ any client losses

I'm sure if they needed to, they could include enough add-ons to make it worth their while

^ This. They are gonna bump it up something shocking and just wait to be negotiated down. They have position power here and in this situation it appears to be the be all and end all.

No point arguing about whether what the agent is doing is fair. We all agree he is going about it all wrong but he has all the cards. We can get upset as much as we like but it isn't going to change the situation. He's playing it smart and I would bet if the shoe was on the other foot we would also do exactly the same. If you had a builder in and he did some work but damaged your boiler would you pay the builder the full amount and then send him the invoice for the boiler repair? Would you bollocks.

As I mentioned before we don't know if it is the agent that is driving all this either. I can't believe for one minute the client will be happy with contractors walking with no notice and not hold the agent somehow accountable.

[northernladuk]

Surely you can't force someone to agree in advance whether they intend to enter into a contract or not? Of course, no reason why client/agent can't offer an extension 25 days before end making it clear this offer will be withdrawn in 5 days. Perfectly fair I guess.

But you are not forcing them, you are negotiating an agreement. If you sign you agree it is fair. It's as simple as that. If you don't like the clause you either negotiate it out or don't take the gig. It's not like they are forcing you to sign. It's your choice.

Will a client think it's fair you can walk with 5 days notice leaving him in the lurch?

[ASB]

It's on the contract so he agreed to it. Legal doesn't come in to it. They have set out an agreement that any extension has to be accepted/declined within 20 days of end of contract. It's a bit harsh but it stops people holding on to the last minute and then using the end of the contract to bail. No entirely unreasonable, particularly if the client has been shafted a number of times already.

Generally it couldn't go beyond the end date of the contract. Thus if an extension was offered 5 days before the end of the contract that could not be used to - in effect - extend the contract by 15 days. [If this wan't the case then the contract would imply serfdom by virtue of the engager offering extension every 20 days and you would be locked in for ever]

In terms of the damage it cuts both ways. I would argue it is clear it means a days pay (though that interpretation is far from universal). Also the clause is in effect a warranty. It would not allow recession since it is not fundamental. So damages would need to be assesed.

So, the argument about reputational damage, advertising, only margin etc does come into it. But I beleive it would fail.

Damages are always assessed with regard to the overall conditions of the contract. These - provided they are reasonable (and this is) - override the "calculated damages" approach.

A simple explanation is here:-

Breach of Contract