it depends on your contract. There will be a clause in the contract that will stipulate what happens in the event of the client or agency going bust. Best advice is to keep harassing the agency to pay.
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Deckster is totally right ... been through all this when Futuro went into administration.
As for a clause in the contract - unlikely - tehre may be one on insolvency but I have never seen one that covers administration ... and even the insolvency clause only says that the contract becomes invalid rather than the contractor being able to get any money from anywhere!
It's a nightmare if it happens, limit your exposure and get credit insurance if you can - but if the agency's credit rating is in the gutter you won't be able to get that.
Windy (history: 2 agencies in administration, 1 umbrella and was on the verge of taking a contract with Woolworths!!)Comment
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It has kind of veered off my original question (doubtless for good reason).
I know (or believe) that the official position is that the client owes the agency 10k and the agency owes you 8.5k and they are separate transactions. Obviously if you claim 8.5k from the agency, you aren't going to get it.
I was asking a different question: if by some means you did persuade the client to give you the 10k, then clearly you would owe the agency some money. My question was, you having current possession of the dosh, how much could the agency claim? Couldn't you counter-claim that the agency's actual loss was limited to the 1.5k that they were contrtacted to make? And so they couldn't claim for more than their actual loss?
I do think that I know the answer, but it does seem to me to be logically a quite different question from the normal one about extracting 8.5k from the corpse.Comment
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No - you wouldn't ....Originally posted by expat View Post
If you persuade the client to pay you 10K then you owe the agency nothing but the client still owes the agency 10K - the fact they have given you the money is irrelevant to what they owe the agency it is not the same debt in law ... which is why the client wouldn't ever pay you the money if he had any sense. The agency (or their administrators) will go after the client for the 10K but not go after you for anything (they might try to scare you a bit but their issue will always be with the client).
I would be VERY surprised if any client agrees to pay the contractor direct as it does not mean they have cleared the debt, the debt still exists they have just been crazy enough to double their exposure.
WindyComment
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