Breach of Contract

**Wilmslow** · 6 July 2008, 12:08

Originally posted by dooker View Post

Hi
Is there anyone out there who could advise me on a "breach of contract matter?"

I started a 3 month contract Feb 2007 and have had this extended every 3 months (due to good work on my behalf and not anything the agency had done for me). I was then offered a 6 month contract taking me to the end of this year, performing a role that is miles away from what i was originally doing. Due to a problem with an invoice a month or two back i was able to get sight of the rate that was being charged to the client business for my services and it transpired that the agency was raking 34% of the fee. I approached the agency and asked if they were willing to reduce this extortionate rate and reward me with a better rate. The answer was swift no.
There is a clause in my contract that states that I can’t work “Directly” for the client business for a period of 6 months after the termination of the current contract. Can anyone clarify what “Directly” means as I have been led to believe that this stops me from running my own company and billing the client business direct, but would not stop me from changing agencies and continuing?
I took advice from other contractors and the work place and they advised me that this the way to go and duly arranged to change to another agency.
I have now received a solicitors letter from the original agency claiming all sorts of breach of contract and that unless I stop working and confirm to them in writing that I have stopped working for the client business, they will start proceedings to get an injunction and prevent me from working there. They have also stated that money still due to me can be withheld and used to offset any financial damages due to them.
I am sure there is someone out there that has had the same or similar problems, so any advice on how it went for you would be greatly appreciated.

Dooker

Are you happy with your take home rate? If so, put up and shut up.

If not happy with the rate, walk if you think you have a better offer elsewhere.

Simple as that I think!

**fzbucks** · 6 July 2008, 14:26

They cannot get an injunction to stop you working for them but they can attempt to claim back any losses they have as a result of your breach of contract.

I went through this and got taken to court - ended up settling out of court for a fraction of what they wanted in the end.

Who's the agency?

**LittlestHobbo** · 6 July 2008, 16:37

i'd be careful, sign up for some professional indemnity insurance and get legal advice through that if you can.

I welched on a contract because my boss was a f**king c**t and i was offered a 35% rate rise else where (god its nice when you can stiff a tosser)

The agency owed me 3 weeks money..which they withheld, in the end i managed to negotiate to get 70% of what i was owed. But realistly I was lucky.

If you are still working for the client possibly through a different agency then they loose their right to substitution you could be liable for their lost earnings on the whole contract.

There's no point griping on what they make, we need them, they need us..just try and negotiate a better rate next time.... don't blink first!

Who was the agency/agent, the rest of us will know to look out for them then..

**malvolio** · 6 July 2008, 17:07

Originally posted by dooker View Post

Hi
Is there anyone out there who could advise me on a "breach of contract matter?"

I started a 3 month contract Feb 2007 and have had this extended every 3 months (due to good work on my behalf and not anything the agency had done for me). I was then offered a 6 month contract taking me to the end of this year, performing a role that is miles away from what i was originally doing. Due to a problem with an invoice a month or two back i was able to get sight of the rate that was being charged to the client business for my services and it transpired that the agency was raking 34% of the fee. I approached the agency and asked if they were willing to reduce this extortionate rate and reward me with a better rate. The answer was swift no.
There is a clause in my contract that states that I can’t work “Directly” for the client business for a period of 6 months after the termination of the current contract. Can anyone clarify what “Directly” means as I have been led to believe that this stops me from running my own company and billing the client business direct, but would not stop me from changing agencies and continuing?
I took advice from other contractors and the work place and they advised me that this the way to go and duly arranged to change to another agency.
I have now received a solicitors letter from the original agency claiming all sorts of breach of contract and that unless I stop working and confirm to them in writing that I have stopped working for the client business, they will start proceedings to get an injunction and prevent me from working there. They have also stated that money still due to me can be withheld and used to offset any financial damages due to them.
I am sure there is someone out there that has had the same or similar problems, so any advice on how it went for you would be greatly appreciated.

Dooker

I get this terrible feeling of deja vu. There's a very similar thread somewehere else around here - hope it wasn't you, it' s very bad manners to post multiple threads.

Oh, but since you ask you deliberaterly broke your contract. Do you think that's a trivial matter? Because most of us don't... Next time try thinking first.

**thunderlizard** · 6 July 2008, 18:04

First off, if you have the end support of the client you are holding a good hand because if they tell the agency to back off they probably will. If the agency has the support of the end client, it's looking ropey for you. If the end client couldn't care less then it still looks fairly ropey.

You seem to be in some doubt whether you have actually breached the contract or not. To my mind "directly" does not include "via another agency" but I suspect the clause in your contract isn't quite that simple. It is also possible that you've breached other stuff (e.g. doing something detrimental to the agency's finances) but again without seeing the clauses it's hard to guess.

Still, I've got better things to do with my Sunday evening than pick through your contract even if you do post it, so I would suggest get some proper legal advice.

At the end of it all, 2 lessons to learn
(1) Think through the blindingly inevitable consequences of what you're doing before you do it. If you take money off somebody they will probably try to get it back.
(2) Any business advice that your competitors give you should be taken with a pinch of salt.

**BolshieBastard** · 6 July 2008, 19:29

Oh dear! Im sure the other contractors told you that was 'the way to go' but it wasnt their pocket on the line, was it?

While I agree its unfortunate the agent was taking a big commission on you, you were presumably happy to work for the agreed rate before this. I really dont see why finding out what the agent's cut is suddenly makes 'your' rate no longer worthwhile.

Its not often agents invoke legal action but you have broken the terms of your contract and, they have every right to claim compensation for the losses you've now presented them with.

You need to get legal advice rather than seek more advice from contractors here and understand that unilaterally breaking an agreement does carry consecquences.

**malvolio** · 6 July 2008, 23:15

WHS - and WIS as well. This is neither a game nor a tax dodge, it is (as I keep saying, if only people would listen) a profession. You want the financial gains of being a contractor, think like a business and don't p*ss around with the legalities.

And next time get qualified advice. Some 90% of contractors have no more idea than you do.

**smiff** · 7 July 2008, 07:56

I welched on a contract because my boss was a f**king c**t

I would never be working if I did that every time I met one.

EDIT: Of course they are not my "boss", but you do have to play ball if they sign the invoices.

**BlasterBates** · 7 July 2008, 08:58

Originally posted by dooker View Post

Hi
Is there anyone out there who could advise me on a "breach of contract matter?"

I started a 3 month contract Feb 2007 and have had this extended every 3 months (due to good work on my behalf and not anything the agency had done for me). I was then offered a 6 month contract taking me to the end of this year, performing a role that is miles away from what i was originally doing. Due to a problem with an invoice a month or two back i was able to get sight of the rate that was being charged to the client business for my services and it transpired that the agency was raking 34% of the fee. I approached the agency and asked if they were willing to reduce this extortionate rate and reward me with a better rate. The answer was swift no.
There is a clause in my contract that states that I can’t work “Directly” for the client business for a period of 6 months after the termination of the current contract. Can anyone clarify what “Directly” means as I have been led to believe that this stops me from running my own company and billing the client business direct, but would not stop me from changing agencies and continuing?
I took advice from other contractors and the work place and they advised me that this the way to go and duly arranged to change to another agency.
I have now received a solicitors letter from the original agency claiming all sorts of breach of contract and that unless I stop working and confirm to them in writing that I have stopped working for the client business, they will start proceedings to get an injunction and prevent me from working there. They have also stated that money still due to me can be withheld and used to offset any financial damages due to them.
I am sure there is someone out there that has had the same or similar problems, so any advice on how it went for you would be greatly appreciated.

Dooker

Looks for another contract. They're well within their rights, and I think that the fact that you go through a different agency they still have a good case. I would see a lawyer first, but changing agencies like you did is not a good idea. You should have taken legal advice beforehand.

Breach of Contract