Unusual liability clause

[SueEllen]

But your company has the insurance to cover the £x millions owed not you. The pimp is presuming everyone has £x million in assets which is stupid. I've pointed this out to many a pimp. There are certain things that are criminal that you personally can't walk away from but if it's a civil matter they maybe not be able to lay a claim to your personal assets as you don't have any.

[mudskipper]

My client tried to introduce a 'side letter' with a similar liability clause. I replied that myCo has professional indemnity insurance, provided a copy of the certificate, and that I would not accept a clause making me personally liable. It got dropped.

[northernladuk]

The fact this client actively looks to claim money back from their contractors would be enough to have me walking. I know it's in the contract but I've never seen it happen and don't think I'd be comfortable at a client that actively does this TBH. Sounds a bit of a nightmare gig.

[FIERCE TANK BATTLE]

Pimp says that they need the clause in there as in the past they have had contractors who do tulip and then they can't reclaim their costs somehow because the contractor closes their company or something.

It sounds like crap to me, surely they can just sue my company and I can't close it while there's outstanding action, plus the insurance would pay for it anyway.

I've been told by the pimp that it means that I am responsible for my limited company and any GDPR breaches or other breaches.

[DeludedKitten]

Nothing to stop you setting up another company and contracting through that, while continuing to be an employee of your first company.

If the first company fails to deliver the contract, and there is a clause that prevents you from going direct, then there is.

[NotAllThere]

Example scenario 1: The contract says that your Ltd can't go direct to the end client for 6 months after leaving, this extra bit is then saying that you as an individual can't set up a new company to go direct in that 6 month period as a way of bypassing the clause

Nothing to stop you setting up another company and contracting through that, while continuing to be an employee of your first company.

[DaveB]

Either way it's extending liability from your Ltd Co. to you personally.

I'd refuse to sign it an if the pimp kicks off apologies to the end client you and explain you can't start as the agency are making unreasonable demands.

Up to you and how badly you want the gig.

[WTFH]

The pimp wants me to sign an agreement separate to the contract which mostly seems OK, except for this clause:

"I agree that, if I cease to be employed by the Consultant Company [My Company] or the Consultant Company ceases to exist or otherwise fails or is unable to duly observe and perform its obligations under the Agreement, I shall observe and be bound by each and all of the terms of the Agreement as if I were a party in place of the Consultant Company."

Sounds a bit like, if something goes wrong, like I end up in hospital and my company can't perform duties, then I personally become liable instead of my company.

No, that reads to me as:
If you (the individual) decide to wind up your current Ltd, then you the individual take on the responsibilities of the contract that you've signed on behalf of your company.
Example scenario 1: The contract says that your Ltd can't go direct to the end client for 6 months after leaving, this extra bit is then saying that you as an individual can't set up a new company to go direct in that 6 month period as a way of bypassing the clause
Example 2: The contract says you need to have PI insurance for 1 year after the contract finishes. You wind up your company, they are saying that you need to make sure you have insurance to cover that extra part.

...at least that's how I read it

[FIERCE TANK BATTLE]

The pimp wants me to sign an agreement separate to the contract which mostly seems OK, except for this clause:

"I agree that, if I cease to be employed by the Consultant Company [My Company] or the Consultant Company ceases to exist or otherwise fails or is unable to duly observe and perform its obligations under the Agreement, I shall observe and be bound by each and all of the terms of the Agreement as if I were a party in place of the Consultant Company."

Sounds a bit like, if something goes wrong, like I end up in hospital and my company can't perform duties, then I personally become liable instead of my company. Could be wrong though. As it also says blah blah I undertake to indemnify the Client on demand in respect of any loss, liability, costs, damages or expenses it may suffer as a result of any failure by the Consultant Company to perform those obligations. But *I* in that context doesn't make sense, my *company* will indemnify them via its insurance policies. Or alternatively, *I* as an *agent* of my company will indemnify them.

Probably not worth worrying about but I just thought I'd solicit some thoughts here.