Reply to: Restrictive covenant

[WordIsBond]

If the contractor who I have recommended goes on record saying he would have never gone through this agency - case closed. There is 0% of the agency making profit here.

Honestly, mate, I've stayed out but this is staggering.

Your contractor friend is not the only one out there, you know. If you don't recommend anyone, as your contract says, then the client goes to the agent and says, "We need a guy." They say, "OK, we'll get you one," and they do. They make loads of revenue and probably rip the guy off and make excessive profit, too. That's the profit they lose because you breached your contract and made a recommendation. And they'll want at least the profit, plus court costs, plus probably enough of a penalty to teach you to never do it again. So I think you can count on their profit loss plus at least 50%, and the court would look favourably on that much of a claim. Penal damages would come in because the breach is blatant, this isn't "I made a mistake and messed up," this is, "You actually just went directly against what you'd contracted to do."

And they just might terminate you, too, and tell the client you breached contract, and they'd be telling the truth.

Just don't do it.

You want to help your mate, and maybe help the client. There's nothing in it for you, you say. Ok. Go to the agent, with whom you have the contract and say, "They want a recommendation, I know I can't do that, but I can recommend the perfect guy for the job. If you'll put him forward I'll back it up." If you really want something for it, you could ask them for a £500 finder's fee or something, or at least a dinner voucher to take your other half to a nice restaurant. Do everyone a favour and stay within your contract all at the same time. What's to lose?

They go to the client and say, "We know you are looking for someone, we've got this guy. He actually even happens to know cannon999 who says he'd be great." Everyone's happy.

Or, if you really want to do it through the client, say, "I actually do know someone who'd be great, but my contract with XYZ Agency doesn't let me make recommendations. If you can sort it out with them, I do know the perfect guy." They do a deal, agency may not be happy but at least they'll get something out of it, and you're in the clear.

[Old Greg]

Let's say in theory the covenant contains two parts to it, first one is the obvious one where it forbids the contractor going direct bluntly speaking. The other part forbids them introducing any other person to the client. How enforceable is the second part?

When you say 'the contractor', do you mean the contractor company or the individual contractor (natural person)?

[Lance]

That's a bit rich coming from the guys who's whole post and subsequent questions which are all fantasy.



Arguable but still tangible. They can prove a loss without question and courts always favour a party that can demonstrate loss. Its the fundamental principle all handcuffs are all based on.


And again, a bit rich. Peiple have tried to help you and examined situations, which are very, real ad infinitum and you have the audacity to say they don't have a clue? Not a clue but the inner workings of courts maybe but you are the one that's constantly demonstrated not having a ue about the whole thing.

You've had your help, you've decided to not listen to a word and been a tad rude so time you did one. I'm done with this.

Yup. Just another ‘I don’t like it so it must be illegal’ argumentative bell end with no practical experience.

[eek]

I won't be breaching anything, I just wanted to find out whether people have had experience with the situation I have described and clearly people have no clue how the court system works here so I will be on my way now.

Something doesn't add up with your posts but not surprising around here.

Court fees are 5% of the amount claimed so it's very much a matter of the agency working out what they can sanely justify and claiming for that amount of money.

For instance if you earn £500 a day and typically stay at the client for a year £120,000 of lost revenue is perfectly arguable, equally £12,000 or even £24,000 of lost commission. £12,000 of lost commission is more likely recoverable from your typical PSC but you may be able to get the lot if you can make it personal...

[northernladuk]

Ok, as long as we have agreed that the scenario that you are trying to sell is a fantasy.

That's a bit rich coming from the guys who's whole post and subsequent questions which are all fantasy.

The agency can claim the moon but nobody is going to take these claims to court. To start with they would be paying the claim fee which on 100k is going to cost pretty penny and nobody is going to pay that knowing full well they don't have a case to claim that amount. So now that we are talking about a small claim (which it would be), legal fees are off the table and they will have to try recover the lost profits which they would struggle to prove or not. This bit is arguable.

Arguable but still tangible. They can prove a loss without question and courts always favour a party that can demonstrate loss. Its the fundamental principle all handcuffs are all based on.

I won't be breaching anything, I just wanted to find out whether people have had experience with the situation I have described and clearly people have no clue how the court system works here so I will be on my way now.

And again, a bit rich. Peiple have tried to help you and examined situations, which are very real, and you have the audacity to say they don't have a clue? Not a clue but the inner workings of courts maybe but you are the one that's constantly demonstrated not having a clue about the whole thing.

You've had your help, you've decided to not listen to a word and been a tad rude so time you did one. I'm done with this.

[cannon999]

If you place a person, at the client, in breach of contract, for 6 months, at £500 a day, then the agency is quite within their rights to claim losses that amount to the loss of revenue. The revenue is what the've been denied and what they will try and claim at the first point of contact (like in the letter).
Assuming it does get to court, and assuming that the defendant has made no attempts to negotiate a lower amount in the run up, then the court will consider the full amount claimed. Which will be based on those numbers.
The judge isn't going to argue that it should be less..... Only the defendant can make that argument....

I'm not confusing profit with revenue. I'm telling you how the legal process will start. They claim high and over a period of months a position of agreement is usually reached, and never gets to court. In the scenarion I put, the likely profit could be around £10k so a good settlement figure for the defendant could be around £4-5k and stay working and everyones happy. Or the defendant takes his chances in court, with the figure that the claimant starts with in court.
If the defendant has evidence of trying to negotiate, and has good evidence to support a far lower loss, then the judge will consider it at likely agree to it.
And any negotiations that are made 'without prejudice' are not submissable as evidence.

If of course, the defendant just turns up with a plan to argue that it should be lower, then they get proper ****ed.

You're right that it's not likely to result in a full claim, but this is where understanding the proces is key. If done incorrectly it will be very costly and when you factor in the claimants legal fees (we're not in the small claims court unless the figure claimed is low), this could well be a significant sum of money at risk.

But hey. You know best. Breach your contract. And keep us updated.

Ok, as long as we have agreed that the scenario that you are trying to sell is a fantasy. The agency can claim the moon but nobody is going to take these claims to court. To start with they would be paying the claim fee which on 100k is going to cost pretty penny and nobody is going to pay that knowing full well they don't have a case to claim that amount. So now that we are talking about a small claim (which it would be), legal fees are off the table and they will have to try recover the lost profits which they would struggle to prove or not. This bit is arguable.

I won't be breaching anything, I just wanted to find out whether people have had experience with the situation I have described and clearly people have no clue how the court system works here so I will be on my way now.

[Lance]

The claimant has to show how the damages were calculated and the court has to determine what the probability of those figures being correct is. Also damages are meant to place the claimant in the same position as if the contract had been performed. That is just basic common sense of contract breaches, I'm surprised you are still trying to peddle this nonsense of the agency trying to claim the entire revenue as damages. That would be binned in court in an instant.

The fact that you are confusing lost revenues with lost profits again makes me doubt anything you said in this thread because it doesn't really sound like you have any experience with contract breaches.

Now if we return to the land of common sense, where the agent is suing for lost profits due to the contract breach - they will need to prove that they more likely than not would have made that profit from my recommendation. If the contractor who I have recommended goes on record saying he would have never gone through this agency - case closed. There is 0% of the agency making profit here.

If you place a person, at the client, in breach of contract, for 6 months, at £500 a day, then the agency is quite within their rights to claim losses that amount to the loss of revenue. The revenue is what the've been denied and what they will try and claim at the first point of contact (like in the letter).
Assuming it does get to court, and assuming that the defendant has made no attempts to negotiate a lower amount in the run up, then the court will consider the full amount claimed. Which will be based on those numbers.
The judge isn't going to argue that it should be less..... Only the defendant can make that argument....

I'm not confusing profit with revenue. I'm telling you how the legal process will start. They claim high and over a period of months a position of agreement is usually reached, and never gets to court. In the scenarion I put, the likely profit could be around £10k so a good settlement figure for the defendant could be around £4-5k and stay working and everyones happy. Or the defendant takes his chances in court, with the figure that the claimant starts with in court.
If the defendant has evidence of trying to negotiate, and has good evidence to support a far lower loss, then the judge will consider it at likely agree to it.
And any negotiations that are made 'without prejudice' are not submissable as evidence.

If of course, the defendant just turns up with a plan to argue that it should be lower, then they get proper ****ed.

You're right that it's not likely to result in a full claim, but this is where understanding the proces is key. If done incorrectly it will be very costly and when you factor in the claimants legal fees (we're not in the small claims court unless the figure claimed is low), this could well be a significant sum of money at risk.

But hey. You know best. Breach your contract. And keep us updated.

[cannon999]

Why don’t you explain how you think it should work?

The claimant has to show how the damages were calculated and the court has to determine what the probability of those figures being correct is. Also damages are meant to place the claimant in the same position as if the contract had been performed. That is just basic common sense of contract breaches, I'm surprised you are still trying to peddle this nonsense of the agency trying to claim the entire revenue as damages. That would be binned in court in an instant.

The fact that you are confusing lost revenues with lost profits again makes me doubt anything you said in this thread because it doesn't really sound like you have any experience with contract breaches.

Now if we return to the land of common sense, where the agent is suing for lost profits due to the contract breach - they will need to prove that they more likely than not would have made that profit from my recommendation. If the contractor who I have recommended goes on record saying he would have never gone through this agency - case closed. There is 0% of the agency making profit here.

[cannon999]

Yes please do. Every step has been explained to you but you've questioned every response despite obviously not having a scooby almost to the point of trolling.

You haven't actually explained anything, just gave a few anecdotal examples which would never stand up in court.

[northernladuk]

Why don’t you explain how you think it should work?

Yes please do. Every step has been explained to you but you've questioned every response despite obviously not having a scooby almost to the point of trolling.

[Lance]

Can you source a reference for this? This sounds totally ridiculous.

Why don’t you explain how you think it should work?

[northernladuk]

Can you source a reference for this? This sounds totally ridiculous.

Why? Agent takes you to court for 50k. Yiu argue you aren't liable and lose. Then you have the opportunity to argue the costs are not realistic and in your opinion the 50k they want for losing a month's commission is unreasonable.

Sounds like common sense no?

[cannon999]

If you lose point 1 then YOU need to demonstrate why the amount being claimed (which could well be much higher than just their margin) is not correct and why.

Can you source a reference for this? This sounds totally ridiculous.

[Lance]

I will err on the side of caution. I am still not convinced that any of these arguements would stand up in court in the particular situation I have described. How do you prove that the client would have paid the £40 on top of the contractor's rate?

you don't understand how courts work.

If it went to court (and there's probably another 5 pages of thread to explain that) there are two questions being asked of the judge.

1) Are you liable for the losses incurred?
2) How much are those losses?

If you lose point 1 then YOU need to demonstrate why the amount being claimed (which could well be much higher than just their margin) is not correct and why.

[northernladuk]

I will err on the side of caution. I am still not convinced that any of these arguements would stand up in court in the particular situation I have described. How do you prove that the client would have paid the £40 on top of the contractor's rate?

It's very simple. That is the agreement with agent and fundamentally how they work and earn their crust. They agree to supply contractors and make X pounds. You sidestep them where they would normally supply the contractor and they just produce the financials as if the contractor went through them. Very easy. I really don't see how you can think they won't stand up. And yet again, this is assuming the client will take the contractor direct, which in a vast majority of cases they won't.

But again.. You are completely misunderstanding the basic fundamentals of contractor engagement. The client has a rate they will pay a agent to find them a contractor. The agent gets the money and pays the contractor an agreed sum. The agent pockets the rest. You get a percentage of the agencies money, not the clients money. The money you get paid is between you and the agent and has no bearing on what the client pays the agent. This is how contractors get screwed by agents pocking 20-25% plus of the money.

I am a little surprised a contractor with so many years under his belt is missing the basics of how we are engaged. A much better understanding of what we do would have made this whole thing a non question.