Reply to: Contract changes by the agency without notice and agreement

[jmo21]

Must admit, if I was being subjected to a rate cut with no mention from the client, I'd be pulling my hiring manager to one side to confirm it.

This.

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[northernladyuk]

That's for a judge to decide. In the 1939 case that I referred to earlier, the negotiations were for "30000 skins at 10d per skin" but the contract for "30000 skins at 10d per lb" so there was clearly an obvious mistake.

If the negotiations were for £300 a day and the agent has put £300 an hour in the contract, that's an obvious mistake.

Psychocandy vs Permatemps Ltd (2015) had a similar situation over £60 / day vs £60 / hour.

[LondonManc]

Or agency thought that they were going to get an increase, agreed a contract with the contractor based on their presumption, and now want to back out of it.

Must admit, if I was being subjected to a rate cut with no mention from the client, I'd be pulling my hiring manager to one side to confirm it.

[RonBW]

They won't be, we've covered that bit.

We're speculating on potential reasons for the contractor's rate cut to be forced upon them and they could be, based on what we've discussed so far:

• Client is operating a rate cut across the board (although these are usually well-communicated when affecting all contractors)
• Client is paying over the odds because agent's cut is huge (agent taking £200 out of a £500 a day budget for example
• Agency made a mistake and passed the whole lot on to contractor, simply copying the agreed day rate from client contract to contractor contract.

Or agency thought that they were going to get an increase, agreed a contract with the contractor based on their presumption, and now want to back out of it.

[LondonManc]

The contractor shouldn't be aware of that.

They shouldn't have knowledge of the full contract between the client and agency including payment amounts and terms which is why you don't want to see it.

They won't be, we've covered that bit.

We're speculating on potential reasons for the contractor's rate cut to be forced upon them and they could be, based on what we've discussed so far:

• Client is operating a rate cut across the board (although these are usually well-communicated when affecting all contractors)
• Client is paying over the odds because agent's cut is huge (agent taking £200 out of a £500 a day budget for example
• Agency made a mistake and passed the whole lot on to contractor, simply copying the agreed day rate from client contract to contractor contract.

[SueEllen]

True; there could have been an admin cock-up where someone has realised that the contractor is getting the whole fee and they forgot to knock off the agency cut before passing it on.

The contractor shouldn't be aware of that.

They shouldn't have knowledge of the full contract between the client and agency including payment amounts and terms which is why you don't want to see it.

[LondonManc]

That's for a judge to decide. In the 1939 case that I referred to earlier, the negotiations were for "30000 skins at 10d per skin" but the contract for "30000 skins at 10d per lb" so there was clearly an obvious mistake.

If the negotiations were for £300 a day and the agent has put £300 an hour in the contract, that's an obvious mistake.

If the negotiations were for £300 a day, the agent put £300 a day in the contract, but is now saying "we meant £250 a day" then that's not going to be an obvious mistake.

Judges will use a degree of common sense every now and then.

True; there could have been an admin cock-up where someone has realised that the contractor is getting the whole fee and they forgot to knock off the agency cut before passing it on.

[RonBW]

Define, objectively and unambiguously, "obvious".

That's for a judge to decide. In the 1939 case that I referred to earlier, the negotiations were for "30000 skins at 10d per skin" but the contract for "30000 skins at 10d per lb" so there was clearly an obvious mistake.

If the negotiations were for £300 a day and the agent has put £300 an hour in the contract, that's an obvious mistake.

If the negotiations were for £300 a day, the agent put £300 a day in the contract, but is now saying "we meant £250 a day" then that's not going to be an obvious mistake.

Judges will use a degree of common sense every now and then.

[SueEllen]

Define, objectively and unambiguously, "obvious".

Judges Ike other lawyers are use to reading complex documents and as this is a B2B contract the OP doesn't get the same leeway as a consumer.

[billybiro]

I would also add -

Was the mistake an obvious one? e.g. a daily rate being listed as an hourly rate? i.e. did you know it was wrong and think "woohoo", or did you genuinely think the new one was what was intended?

If the mistake was obvious, then the courts would not find the contract binding.

Define, objectively and unambiguously, "obvious".

[jmo21]

As you say, it's also the standard way that rate cuts across the board are done - notice served and all contractors reissued with contracts taking them up to the same end date as the original.

If it's an isolated incident, I'd always think that the agency is on a massive margin.

Very true, and something for the OP to keep in mind.

[LondonManc]

One of the many reasons they want to reduce the rate, yes.

As you say, it's also the standard way that rate cuts across the board are done - notice served and all contractors reissued with contracts taking them up to the same end date as the original.

If it's an isolated incident, I'd always think that the agency is on a massive margin.

[jmo21]

It could be that the client doesn't know what a massive cut the agent is taking.

If the client is paying £500 and the OP (with due respect) is a £300 a day contractor, then the client would no doubt want to reduce the rate.

One of the many reasons they want to reduce the rate, yes.

[LondonManc]

It sounds like the client simply want to reduce the rate paid.

If they want to do this, they are effectively saying "We are terminating your contract. Would you like a new one on a reduced rate?"

This is relatively common mechanism when a client wants to cut a rate.

It could be that the client doesn't know what a massive cut the agent is taking.

If the client is paying £500 and the OP (with due respect) is a £300 a day contractor, then the client would no doubt want to reduce the rate.

[jmo21]

It sounds like the client simply want to reduce the rate paid.

If they want to do this, they are effectively saying "We are terminating your contract. Would you like a new one on a reduced rate?"

This is relatively common mechanism when a client wants to cut a rate.