Strange Contract Terms

[Samm]

Hi all,

I was looking for an opinion on some wording within an outside IR35 contract. Under a section called `competence`it states the following:

The contractor services will therefore be monitored continuously to ensure that competence to the requisite quality and quantity required by Agency X and Agency X's client is achieved within the required timescales (which will typically be in 2 weeks or 4 weeks of the start date); and once (and if) initial competence is demonstrated it is maintained for the duration of the term of the assignment.

In the event that Agent X or Agent X's client believes that you or the contractor have failed to maintain the level of competence required under clause 4/1 then Agent X shall be entitled at any time at its absolute discretion (and without further liability to you) to terminate the contractor services. In the event of early termination of the contractor Services during the intitial term under this clause 4.2 Agent X shall be entitled to deduct from monies owed to you up to 10 days of Day Rate as set out under clause 10.

I have been contracting for 8 years now and I have never known for an agency to deduct monies up to 10 days if the client decides to terminate. So essentially I won't be be able to bill even though I work 10 days and the client decides they aren't happy and wish to terminate. This can't be normal...is it? If I work a day I expect to bill for that day. The shoddy agents that I have been liaising with have dodged me for weeks after saying its a quick start and now its been one month one and they send me out this contract on a Friday the weekend before I am supposed to start. I also have no time to get an IR35 review and I'm left not feeling to comfortable or happy with some of this wording. I feel nervous that I could start the role and work for 10 days, client may or may not terminate in 12 days and I can only invoice for 2 days because the agency will take 10 days worth of day rate. Something doesn't add up or seem right.

Please advise!

[northernladuk]

At least you are showing financial risk as evidence of your outside IR35 status I guess.

Strike it out, sign it and send it back? They won't notice so you'll effectively have started without it in? Dunno if that works or how it stands legally though.

[Samm]

northernladuk come on, you usually give some great advice! Have you come across this before? Doesn't seem normal does it? Client and Agent X have covered their arses and I'll be sat like muggins if client terminates after 2 weeks and agent x takes the full 2 weeks (10 days) under clause 10. Is it a bit tulip?

[malvolio]

Obvious answer: don't sign it, tell the client that the agency is offering rubbish terms and find something else.

Either this is the agency playing silly buggers or the client. Do you really want to work with either one?

That assumes you don't need the work of course....

[northernladuk]

northernladuk come on, you usually give some great advice! Have you come across this before? Doesn't seem normal does it? Client and Agent X have covered their arses and I'll be sat like muggins if client terminates after 2 weeks and agent x takes the full 2 weeks (10 days) under clause 10. Is it a bit tulip?

Nope never seen this before I am afraid so just had to go for the generic advice when you see anything you don't like in your contract. Strike it out, sign and send back. I've just no idea if that actually works or not though.

It is a pretty awful clause I must say. I think you are throwing the baby out with the bathwater through. The client has to terminate you after two weeks IF you've been incompetant. It won't stand if the client runs out of budget or project gets canned. It's only if you get terminated through something you did wrong or badly. That reduces the risk signficantly.

Problem is clients will say anything they want to get rid of you so they might say you are crap when really it's just your face doesn't fit. There is nothing you can do about it.

If you are an average perma tractor or a contractor that's been bounced numerous times (we've all met them but they can't see it's their fault) then you need to worry. If you are good at what you do you should be fine.

The other option is say no and lose more than a months income sitting on the bench.

[ladymuck]

It is a very strange clause.

I see no reason why the agency should be withholding funds from you based on what could be rather arbitrary grounds. Usually what happens should the client be unhappy with the quality of your work (or your face doesn't fit) is that they refuse to sign a time sheet or two and either immediately terminate or serve notice, depending on how much you've annoyed them.

Have you had an independent contract review? I'd get a second opinion on it and tell the agency that you're not happy with that clause and are taking legal advice.

[northernladuk]

They must have some crap contractors on their books if they feel the need to put that in a contract. Obviously been burned before. Totally irrelevant but out of interest what is the notice period?

[Samm]

It is a very strange clause.

I see no reason why the agency should be withholding funds from you based on what could be rather arbitrary grounds. Usually what happens should the client be unhappy with the quality of your work (or your face doesn't fit) is that they refuse to sign a time sheet or two and either immediately terminate or serve notice, depending on how much you've annoyed them.

Have you had an independent contract review? I'd get a second opinion on it and tell the agency that you're not happy with that clause and are taking legal advice.

Thats what I thought, it is going to be subjective on what is deemed to be good enough for the client, I was hired based on interview and strength of CV too. That's the thing, I have had no time to get a contract review done on this as they only sent me a contract today and expect me to start on Monday. I have already had 2 calls with the client prior to the contract actually starting and I have urged the agency that any more calls with the client should be once I have actually started. I mean this isn't a charity and I'm not giving all this time for nothing. I'm expected to have a call on Monday morning now and I have not and don't intend to sign this contract. I tried to push it back a few days today as the contract hadn't come through but they are adamant for me to start Monday. Do they think I won't read the small print and how can they possibly think its ok to ask me to potentially work for free for 2 weeks if the client suddenly terminates. I have just had a bad overall experience so that's why I am hesitant and have cold feet. Ducking and diving and no one wanting to speak to me on the phone, just incase I ask questions. They only care about their client. Not a great way to build relationships with contractors. Any advice on who would be able to carry out an independent contract review and give some legal advice on it, not only from an IR35 perspective but also just to keep me right and protect my interests?

[Samm]

They must have some crap contractors on their books if they feel the need to put that in a contract. Obviously been burned before. Totally irrelevant but out of interest what is the notice period?

Notice period is 5 days on both sides. However the small print states that if I am served notice they don't need to pay me for the notice.

[Samm]

In addition contract terms states that in the event that I am terminated early by the agency they are entitled to set off from monies owed to me a maximum of up to 10 days rates as damages for any loss that the agency may suffer as a result of termination and shall be deemed as a liquidated debt owed to the agency and payable on demand. Then it also states that agency is entitled to terminate the contract at any time during the assignment by giving me 20 days notice.