Verbal Contract or not?

[limey]

Hi, I'm in the middle of trying to get my first contract, and I'm not sure whether the agent has pulled a fast one on me.
1. firstly, he knocked the rate down by 15 quid, saying that the client had hired some contractors at the lower rate, and he didn't want to upset them by paying me a higher rate. I was reluctant, but agreed to this without really thinking through on it.
2. He says the client wants me to start this Monday coming, giving me only about 3 days to set up the company etc.

So have I verbally accepted a contract? What concerns me is he sneakily said afterwards, "good, I've now got your word on that".

But what I'm planning to do is get the company set up via one of the specialist accountants and get a contract reviewed for IR35.

I'm just wondering whether I'm already in a contract, and with who, the agent or client? Also, I haven't even set up the company yet, so am I now an "employee" of the agency or client or something? I thought any contract would be between a new limited company and the agency or client?

thanks in advance for any advice on this guys!

L.

[NotAllThere]

He obviously didn't hear you add "...subject to satisfactory contract". No. You're not in contract. At least, not in any enforceable way.

The contract will be between your ltdco and the agency.

[oscarose]

Hi, I'm in the middle of trying to get my first contract, and I'm not sure whether the agent has pulled a fast one on me.
1. firstly, he knocked the rate down by 15 quid, saying that the client had hired some contractors at the lower rate, and he didn't want to upset them by paying me a higher rate. I was reluctant, but agreed to this without really thinking through on it.
2. He says the client wants me to start this Monday coming, giving me only about 3 days to set up the company etc.

So have I verbally accepted a contract? What concerns me is he sneakily said afterwards, "good, I've now got your word on that".

But what I'm planning to do is get the company set up via one of the specialist accountants and get a contract reviewed for IR35.

I'm just wondering whether I'm already in a contract, and with who, the agent or client? Also, I haven't even set up the company yet, so am I now an "employee" of the agency or client or something? I thought any contract would be between a new limited company and the agency or client?

thanks in advance for any advice on this guys!

L.

This is standard practice, especially if you’re seen to be a bit green.

[Murder1]

You're not in contract until you sign something - granted the agent may kick off a little but there's nothing binding.

As for the "knock me down by £15" I had the same thing happen to me when I first started and just swallowed the bull from the agent - only to find that the other contractors had all stood there ground on their initial rates.

I'm nervous about advising people to hold out for more money, but your two options are to form the company and take the £15 hit with a view to increasing it at first renewal - or stand your ground on the rate and run the risk of losing the contract (however unlikely that is).

[The Agents View]

Standard procedure really

So have I verbally accepted a contract? What concerns me is he sneakily said afterwards, "good, I've now got your word on that".

100% standard practice, to invoke EXACTLY this feeling and whilst it has absolutely no legal standing, it's designed to make you doubt renegading your decision.

I would normally say - "Great - well that's agreed then, and I know you're a man/woman of your word, so I'll commit to the client over the phone, and get the contracts out to you - welcome aboard"

It's a bit cynical, and it's not strictly necessary - but it's also a great Litmus test - if there's any doubts at that point, it will come out (in theory) if you've put the contractors integrity into the mix generally!

[psychocandy]

Hi, I'm in the middle of trying to get my first contract, and I'm not sure whether the agent has pulled a fast one on me.
1. firstly, he thought he could get away with screwing another 15 quid for his cut, saying that the client had hired some contractors at the lower rate, and he didn't want to upset them by paying me a higher rate. I was reluctant, but agreed to this without really thinking through on it.
2. He wants you to start so he gets his cut asap starting Monday coming, giving me only about 3 days to set up the company etc.

So have I verbally accepted a contract? What concerns me is he sneakily said afterwards, "good, I've now got your word on that".

But what I'm planning to do is get the company set up via one of the specialist accountants and get a contract reviewed for IR35.

I'm just wondering whether I'm already in a contract, and with who, the agent or client? Also, I haven't even set up the company yet, so am I now an "employee" of the agency or client or something? I thought any contract would be between a new limited company and the agency or client?

thanks in advance for any advice on this guys!

L.

FTFY

[ChimpMaster]

If you're not happy with the agreement, don't accept the contract. The positive side to this will be that the agent will be p1ssed off and will realise that he's lost a chance to earn because of his greed over £15.

Start looking elsewhere.

[The Agents View]

If you're not happy with the agreement, don't accept the contract. The positive side to this will be that the agent will be p1ssed off and will realise that he's lost a chance to earn because of his greed over £15.

Start looking elsewhere.

Yeah - pure greed.

Lets assume he's been squeezed by a tenner by the client (clients squeeze on every contract - it's their perogative). So he's squeezed this guy by £15. His cash margin has gone down a bit, but his percentage is a bit higher. So lets say the difference when it comes out, is £5 (although in practice, it's probably more like £3).

Now lets look at the commission schedule. At a guess, this agent takes 10% of his profit as a commission. So that squeeze, has earned him a grand total of 50p per day. By the time the tax man has taken his cut - that's what, £9 per month?

So you are telling me, that this agent, has risked P'ing off the client, and the candidate, and risked losing the deal for the sake of £9?

Or MAYBE the agent has been squeezed by £15 because others have taken lower rates, and the client actually doesn't want to upset the apple cart, so has kept all the rates the same?

Seriously - for a forum which is meant to be made up of business people - some of the posts on here lack even the most basic understanding of business principles.

[ChimpMaster]

Yeah - pure greed.

Lets assume he's been squeezed by a tenner by the client (clients squeeze on every contract - it's their perogative). So he's squeezed this guy by £15. His cash margin has gone down a bit, but his percentage is a bit higher. So lets say the difference when it comes out, is £5 (although in practice, it's probably more like £3).

Now lets look at the commission schedule. At a guess, this agent takes 10% of his profit as a commission. So that squeeze, has earned him a grand total of 50p per day. By the time the tax man has taken his cut - that's what, £9 per month?

So you are telling me, that this agent, has risked P'ing off the client, and the candidate, and risked losing the deal for the sake of £9?

Or MAYBE the agent has been squeezed by £15 because others have taken lower rates, and the client actually doesn't want to upset the apple cart, so has kept all the rates the same?

Seriously - for a forum which is meant to be made up of business people - some of the posts on here lack even the most basic understanding of business principles.

No, it's more likely that the client hasn't squeezed the agent, and the agent is simply screwing the contractor. The contractor, being green, has little experience of this but is clearly unhappy and hence chooses to post here for opinions.

And you should know, it's not just about commission, it's about targets - and every penny counts.

[Gentile]

Hi, I'm in the middle of trying to get my first contract, and I'm not sure whether the agent has pulled a fast one on me.
1. firstly, he knocked the rate down by 15 quid, saying that the client had hired some contractors at the lower rate, and he didn't want to upset them by paying me a higher rate. I was reluctant, but agreed to this without really thinking through on it.
2. He says the client wants me to start this Monday coming, giving me only about 3 days to set up the company etc.

So have I verbally accepted a contract? What concerns me is he sneakily said afterwards, "good, I've now got your word on that".

But what I'm planning to do is get the company set up via one of the specialist accountants and get a contract reviewed for IR35.

I'm just wondering whether I'm already in a contract, and with who, the agent or client? Also, I haven't even set up the company yet, so am I now an "employee" of the agency or client or something? I thought any contract would be between a new limited company and the agency or client?

thanks in advance for any advice on this guys!

L.

You can certainly walk away at this point, if that's all you're asking. As the old adage goes, 'verbal contracts' aren't worth the paper they're not written on.

As for the £15 (per day, I hope) drop that's been foisted upon you, you just need to decide whether you want to walk away at this point knowing what's happened. Over a 3 month contract, that £15 amounts to a difference of £975; it's up to you whether you want to consider that to be school fees from the University of Life for the lesson of how to negotiate next time or not. It could be the case that you kick up a stink at this point, and it may be too late to do so since the agent's already agreed their rate with the client, in which case you'd be looking at even higher school fees for learning the lesson that you only get to negotiate each contract once.