Renegotiating a contract under special circumstances

[rd409]

Hello folks,
I finished my contract last friday, and before I know it I was offered another contract by an agency. Everything is fine in the contract, and I even have a substantial rise in my daily rate.

All happy till now. I have not yet signed a contract, and have started working on this for last 2 days. Now I just saw an email with the actual rate that the client is paying. Now the agency cut is nearly 25%.

The contract is only 3 months, so do you guys suggest I should sign the contract with a pinch of salt and make sure to claim the hike in the next renewal, or should I twist the arm now and possibly burn the bridge.

The situation gets even more complicated as the client badly needs me, and I am hopeful to get another offer very soon. I think if I get this second offer, I can use that as a negotiating tool for the rate increase.

Hopefully this makes sense.

[TheFaQQer]

I finished my contract last friday, and before I know it I was offered another contract by an agency. Everything is fine in the contract, and I even have a substantial rise in my daily rate.

Well done - a substantial rise is a good thing to get.

All happy till now. I have not yet signed a contract, and have started working on this for last 2 days.

Don't understand - have you started work on the contract? If so, then you have accepted it whether it is signed or not.

Now I just saw an email with the actual rate that the client is paying. Now the agency cut is nearly 25%.

The contract is only 3 months, so do you guys suggest I should sign the contract with a pinch of salt and make sure to claim the hike in the next renewal, or should I twist the arm now and possibly burn the bridge.

If you've already started work, then you've accepted the contract. What "hike" is there that you think you can "claim"? The rate that the agency charges the client really is none of your business - you have accepted a rate that you are happy with (with a substantial rise), so what difference does the agency rate make?

The situation gets even more complicated as the client badly needs me, and I am hopeful to get another offer very soon. I think if I get this second offer, I can use that as a negotiating tool for the rate increase.

Doesn't really make it complicated - you have accepted a contract. If you want to leave that contract, then you should check out the terms under which you can leave. Having somewhere else to go to is no bargaining tool for extorting money from your client - if I were the PM, it would be a quick way out of the door, to be honest.

[Scrag Meister]

Well done - a substantial rise is a good thing to get.



Don't understand - have you started work on the contract? If so, then you have accepted it whether it is signed or not.



If you've already started work, then you've accepted the contract. What "hike" is there that you think you can "claim"? The rate that the agency charges the client really is none of your business - you have accepted a rate that you are happy with (with a substantial rise), so what difference does the agency rate make?



Doesn't really make it complicated - you have accepted a contract. If you want to leave that contract, then you should check out the terms under which you can leave. Having somewhere else to go to is no bargaining tool for extorting money from your client - if I were the PM, it would be a quick way out of the door, to be honest.

Stick with it for 3 months. Re-negotiate at renewal. You were happy with the rate when you negotiated. They may have gone for a higher margin as it is a short contract.

[thunderlizard]

Don't understand - have you started work on the contract? If so, then you have accepted it whether it is signed or not.

I think that has to be taken with a bit of leeway. I'd agree that if you've started work, delivered something, invoiced and been paid for it, then you've definitely accepted the contract. I'm not sure that's true as soon as your bum has hit the chair, and when all you've done is a couple of days' worth of meeting people and reading documents.

[TheFaQQer]

I think that has to be taken with a bit of leeway. I'd agree that if you've started work, delivered something, invoiced and been paid for it, then you've definitely accepted the contract. I'm not sure that's true as soon as your bum has hit the chair, and when all you've done is a couple of days' worth of meeting people and reading documents.

If the offer specifies a method of acceptance (such as by post or fax), acceptance must be by a method that is no less effective from the offeror's point of view than the method specified. The exact method prescribed may have to be used in some cases but probably only where the offeror has used very explicit words such as "by registered post, and by that method only": see Yates Building Co. Ltd v. R.J. Pulleyn & Sons (York) Ltd (1975) 119 Sol. Jo. 370.

However, acceptance may be inferred from conduct, see, e.g.: Brogden v. Metropolitan Railway Company (1877) 2 App. Cas. 666; Rust v. Abbey Life Assurance Co. Ltd [1979] 2 Lloyd's Rep. 334; Saint John Tugboat Co. v. Irving Refinery Ltd (1964) 46 DLR (2d) 1; Wettern Electric Ltd v. Welsh Development Agency [1983] Q.B. 796.

Brogden set the precedent that by starting work you have accepted the contract. If you are going to argue that the contract doesn't start until you've "delivered something, invoiced and been paid for it" then you shouldn't be paid for it, since you did the work before a contract was formed.

[rd409]

I think that has to be taken with a bit of leeway. I'd agree that if you've started work, delivered something, invoiced and been paid for it, then you've definitely accepted the contract. I'm not sure that's true as soon as your bum has hit the chair, and when all you've done is a couple of days' worth of meeting people and reading documents.

I've never read documents during work hours. I usually take them home and read in the evenings. I have started working on a project and think the best thing to do is to ignore the agency cut atm. I definitely think there is renewal chance, so will make sure I raise the game during the renewal.

[rd409]

So now the renewal is on the table and I am not sure if the client has a budget for a rate increase or not.

My idea of dealing with the negotiation is as follows:

• Say to the client that I am all set for the renewal, and will discuss it with the agent.
• Call up agent and ask him for rate hike. Will not mention about the knowledge about his cut as on yet.
• See if he offers any hike. Tell him that the market rate atm is £x, and I would not be happy to work for a short term contract on rate less than 10% of the market rate at the max.
• I am sure he is going to call the client and ask for the rate hike with them as well. If they increase the rate and I get my desired hike, I don't care what cut he gets. Everyone's happy.
• If the client refuses any hike or the hike is minimal and the agent is greedy enough to not pass any hike to me. I will tell him that he has already made enough (25%) for the efforts that he has put in securing a role for me in the first place. A renewal is all my efforts, and all he is getting from the renewal is for the amount of paperwork (a grand total of 3 invoices) he has to deal. My idea is 10% at the max.

Is this a good idea? I also have initial interest from couple of other agencies for new contracts, and they are offering the market rate plus a premium for me to get on board. I know a contract in hand is better than none, but considering the market in my specialization, I am confident I can afford to walk away, and the agent is going to find it hard to replace me.

[dynamicsaxcontractor]

So now the renewal is on the table and I am not sure if the client has a budget for a rate increase or not.

My idea of dealing with the negotiation is as follows:

• Say to the client that I am all set for the renewal, and will discuss it with the agent.
• Call up agent and ask him for rate hike. Will not mention about the knowledge about his cut as on yet.
• See if he offers any hike. Tell him that the market rate atm is £x, and I would not be happy to work for a short term contract on rate less than 10% of the market rate at the max.
• I am sure he is going to call the client and ask for the rate hike with them as well. If they increase the rate and I get my desired hike, I don't care what cut he gets. Everyone's happy.
• If the client refuses any hike or the hike is minimal and the agent is greedy enough to not pass any hike to me. I will tell him that he has already made enough (25%) for the efforts that he has put in securing a role for me in the first place. A renewal is all my efforts, and all he is getting from the renewal is for the amount of paperwork (a grand total of 3 invoices) he has to deal. My idea is 10% at the max.

Is this a good idea? I also have initial interest from couple of other agencies for new contracts, and they are offering the market rate plus a premium for me to get on board. I know a contract in hand is better than none, but considering the market in my specialization, I am confident I can afford to walk away, and the agent is going to find it hard to replace me.

Are you happy with client and project? If so no point in rockin the boat to much. 25% is a bit steep, try to push it down to 20% or even 15%.

Good luck.

[SueEllen]

Are you happy with client and project? If so no point in rockin the boat to much. 25% is a bit steep, try to push it down to 20% or even 15%.

Good luck.

If you ask for 25% you may get 15%