Reply to: Agency added completion payment clause negligently without client knowledge

[pr1]

Would you care to be Prime Minister? The position is currently vacant and has been for a couple years, even if the Tories seem not to have figured that out yet.

not for £150k/y, no

[WordIsBond]

never accept the first offer

Would you care to be Prime Minister? The position is currently vacant and has been for a couple years, even if the Tories seem not to have figured that out yet.

[pr1]

never accept the first offer

[WordIsBond]

it in no way sets n expectation, unless there's something beyond what's in the contract.

Admittedly, I'm reading between the lines that there is indeed 'something beyond what's in the contract.'

Like OP saying that he took this contract based on that expectation. You wouldn't do that on something completely nebulous like you've suggested. You would do that because either you've been told what can be expected or what has been done historically.

If he asks the agency and they say, 'Yes, sometimes some of our clients will do this, so it's in all our contracts. This one won't, though,' then he wouldn't have taken the contract, would he?

I think we can safely conclude that he was told the client DOES give completion bonuses. He was told they aren't guaranteed and that's why the contract wording is the way it is, but that is what they do. Otherwise, he wouldn't have taken the decisions he did.

And furthermore, the outcome makes it obvious. They don't offer £2K for nothing, or waive a non-compete unless they've got egg on their faces pretty badly. They made a right mess of it. Maybe they only offered those things because they felt a moral obligation to do something for him, or maybe they did it because they were concerned they just might be vulnerable legally. Doesn't matter much, they did it because they are acknowledging that they set an expectation.

If OP is able to go back to the client direct for six more months, the non-compete going away may turn out to be a relative win-win. It probably cost the agency nothing -- the client probably wasn't going to use them to replace him after this mess. But at least they don't have to pay out, and if he can renew direct at the same cost to the client, he'll be ok.

[ComplianceLady]

But he is assuming 15% of invoice value based on what other contractors have received, the contract didn't set out a value and the client obviously didn't state a value so they haven't offered anything as part of the contrct - they offered an entirely discretionary bonus. They could have that in the standard contract without the clients being aware of it and use it for some clients and not others - it in no way sets n expectation, unless there's something beyond what's in the contract.And they are offering 2k - so they've entirely fulfilled the expectation they set out, a possible bonus at an entirely discretionary amount.

Legally, your case isn't very strong unless you can prove you've actually suffered loss. You say you passed on other contracts that paid better. Do you have proof of better-paying offers? If so, your loss is the lesser of two figures: 1) the expected bonus 2) the difference between what you have received and what you can prove you would have received in a different contract. The loss of a potential contract is worth nothing, but if you actually had an offer of a better contract that you turned down, I suspect a court would not be particularly approving of their behaviour. They offered and wrote into the contract something that created an expectation when there was no possibility of that expectation being fulfilled. That's simply not appropriate, but you have to be able to prove loss, and if there was no other firm contract offer, you can't prove it.

So yes, there could be a legal case here. I disagree with those who said there is no case. Whether it is worth it is another matter, I doubt it is. The cost and hassle of it probably isn't worth it.

Morally, their position is reprehensible. They made an offer with a provision which was lucrative for other contractors, therefore creating an expectation for you, but it was never going to be beneficial to you, and they knew that when they made the offer. You might tell them you are considering walking and will never work with them again after this contract.

Reading between the lines, £10K is about £1.5K / month over seven months. So if that's 15%, then the contract is somewhere around £10K / month without this completion payment? Of course £10K is significant money, but do you want to mess up a £10K / month contract over it? And it isn't £10K, it's £8K, since they've offered £2K.

If you had a firm contract offer you passed, I'd likely take it to them and say, 'This is what I passed on because of this.' They do have some room to negotiate here, they've been clearing at least £1K a month out of this contract, and I doubt they are taking less than 10%. They probably can't very well cover the full £10K, though, but you might get another £1-2K out of them if you can prove you've suffered loss. To get more than that you might have to go to court, and it won't be worth it.

If you can't prove (with evidence of another offer) that you've suffered loss, I'd just take the £2K, keep my head down, wow the client, earn a renewal, and then expect a nice increase. If asked why, you can say that you've been working below your normal rate because of an expectation of a completion payment, and you aren't willing to do that anymore. If they or the client can't come up with some more money, you are gone.

If you are mad enough, find another contract. Everybody knows you've not been treated well. The agent is going to get the blame on this one, if you aren't a jerk when leaving.

[Status500OK]

@WordIsBond many thanks for your advice and analysis of situation. As you suggested the hassle to take the agency to the court would not have been worth it.

I decided to draw a line and handed in my 4 weeks' notice and shamed them enough that they released me from non-compete clause - so the client can potentially directly contract my services.

I just may enjoy some sunshine this summer

[WordIsBond]

Legally, your case isn't very strong unless you can prove you've actually suffered loss. You say you passed on other contracts that paid better. Do you have proof of better-paying offers? If so, your loss is the lesser of two figures: 1) the expected bonus 2) the difference between what you have received and what you can prove you would have received in a different contract. The loss of a potential contract is worth nothing, but if you actually had an offer of a better contract that you turned down, I suspect a court would not be particularly approving of their behaviour. They offered and wrote into the contract something that created an expectation when there was no possibility of that expectation being fulfilled. That's simply not appropriate, but you have to be able to prove loss, and if there was no other firm contract offer, you can't prove it.

So yes, there could be a legal case here. I disagree with those who said there is no case. Whether it is worth it is another matter, I doubt it is. The cost and hassle of it probably isn't worth it.

Morally, their position is reprehensible. They made an offer with a provision which was lucrative for other contractors, therefore creating an expectation for you, but it was never going to be beneficial to you, and they knew that when they made the offer. You might tell them you are considering walking and will never work with them again after this contract.

Reading between the lines, £10K is about £1.5K / month over seven months. So if that's 15%, then the contract is somewhere around £10K / month without this completion payment? Of course £10K is significant money, but do you want to mess up a £10K / month contract over it? And it isn't £10K, it's £8K, since they've offered £2K.

If you had a firm contract offer you passed, I'd likely take it to them and say, 'This is what I passed on because of this.' They do have some room to negotiate here, they've been clearing at least £1K a month out of this contract, and I doubt they are taking less than 10%. They probably can't very well cover the full £10K, though, but you might get another £1-2K out of them if you can prove you've suffered loss. To get more than that you might have to go to court, and it won't be worth it.

If you can't prove (with evidence of another offer) that you've suffered loss, I'd just take the £2K, keep my head down, wow the client, earn a renewal, and then expect a nice increase. If asked why, you can say that you've been working below your normal rate because of an expectation of a completion payment, and you aren't willing to do that anymore. If they or the client can't come up with some more money, you are gone.

If you are mad enough, find another contract. Everybody knows you've not been treated well. The agent is going to get the blame on this one, if you aren't a jerk when leaving.

[Status500OK]

@northernladuk thanks, there is nothing more sobering than a dose of reality - analysed in great detail. much appreciated

@WTFH damn, at that rate, I chose the wrong profession

[northernladuk]

£3k? Good luck with that!
Try £200-400 per hour, and they charge for reading emails, answering the phone etc.
If you end up going to court and want to do it properly, a barrister runs about £5k per day.

And when it comes down to it, a solicitor will review what's happened and probably advise you to take the offer.
If you ended up going to court having rejected a reasonable offer, whether the judge ruled in your favour or not, you would most likely be liable for both sides costs.

Absolutely correct but what I am assuming here is there will be a number of letters sent between the two legal parties and a compromise will be offered well before it starts getting too silly... but absolutely yes, they can eat the value of his claim well before court.

[WTFH]

I don't think you've got a hope in hell here and any lawyers fees are going to seriously reduce anything you get back. You spend 3k on a lawyer you get's you a 50/50 result i.e. 5k and you've got how much left.. Oh look.. 2k! And if this is stressing you out, wait until you start a legal process off. You'll be shelling out for what appears to be very little movement over a long number of months with no guarantee of anything.
That said, nothing wrong with trying for a free consultation so you've settled your mind. Nothing wrong with 'what if' floating around but I still don't think it will be good news.

£3k? Good luck with that!
Try £200-400 per hour, and they charge for reading emails, answering the phone etc.
If you end up going to court and want to do it properly, a barrister runs about £5k per day.

And when it comes down to it, a solicitor will review what's happened and probably advise you to take the offer.
If you ended up going to court having rejected a reasonable offer, whether the judge ruled in your favour or not, you would most likely be liable for both sides costs.

[northernladuk]

Are there any clauses in your contract about the agency not paying you if they don't get paid by the client? That doesn't help your argument either as the client will just say I'm not paying, the agent will say 'Well done you deserve a bonus, so when the client pays it, we'll pay you.

[northernladuk]

IMO all the answers are in your post. Unfortunate in your emotional state it's hard to see the cold hard facts.

So going through a few points...

The client is really happy with my work and I would have received the payment, only if they knew.

No you wouldn't. If they knew then it wouldn't have been in there. You said it yourself.

When I enquired about my payment, the client was surprised to know that the agency had included the clause in my contract, even though they had instructed the agency that new contracts, around the time I started work, will not be offered completion payment. The client confirmed that the agency has made a mistake.

The wording of the clause is absolutely awful. IMO you should have asked them for clear terms.

This line alone should end the whole argument.

‘Nothing in this Agreement shall give any Contractor and/or their Consultant(s) any right to the Completion Payment’

But you've got to where you are so lets look at the other clause.

‘The amount of the Completion Payment will be determined by the Client in its sole discretion based on such factors as the Client shall determine in its absolute discretion,
including the quality of the Services and Deliverables provided.’

So they can pay what they want. It says it will include factors but the wording to me comes down to 'The client can pay what they want'. As there are no KPI's around the factors they mention so they are utterly worthless

They didn't mean it to be in there and weren't really prepared to pay any contractors around that time any bonuses so they can decide to pay you nothing. It's at their sole discretion.

I asked the agency to compensate me for the loss of income. The agency initially offered £2k as goodwill gesture,

IMO, bearing the other factors above in this is a bloody good result! Snap their hand off.

implying through the tone and language of emails, that they would rather be happy if I left the new contract.

Of course they would, you are a problem to them so they want you gone. I know it's no fault of yours but still. The easiest way to address this problem is to remove it.

I don't think you've got a hope in hell here and any lawyers fees are going to seriously reduce anything you get back. You spend 3k on a lawyer you get's you a 50/50 result i.e. 5k and you've got how much left.. Oh look.. 2k! And if this is stressing you out, wait until you start a legal process off. You'll be shelling out for what appears to be very little movement over a long number of months with no guarantee of anything.
That said, nothing wrong with trying for a free consultation so you've settled your mind. Nothing wrong with 'what if' floating around but I still don't think it will be good news.

[Status500OK]

@WTFH sigh, I understand what you mean by lawyer and deep pockets. Re discretion for bonus payment, the agency advised me that it is beween me and the client, hence i brought it up with the client, at the end of the contract. Agency contracts team was negligent/messed up and seems like now got away with it too

@Lance loved the Jam tomorrow

[WTFH]

hiya WTFH, many thanks for your reply. Re the discretion and discussing the completion payment with the client - I was advised by the agency that it is something the client will inform me about - hence, I brought it up with the client at the end of contract. I understand that the client does not has to pay, as their contract with agency is clear. I am seeking a reasonable remedy from the agency, with whom I have the contract, for being negligent. Sigh, I understand your point about lawyers and deep pockets

But if the agent do not get paid by the client, how is the agent negligent?

[Status500OK]

If you want a solicitor that does a good job, have deep pockets.

But going back to the start, you say that the client was surprised a bonus was in your contract, because they weren't offering one.
The question of discretion does arise - if the client isn't paying you a bonus because they did not intend you to have one due to your contract, then that's the deal.
But speaking of discretion, it sounds like you have discussed your contract directly with the client. You might want to check the contract to see what it says about that.

Yes, it's sad that you were hoping for a completion bonus that the client was never going to pay, but the best you could hope for from an agent would be some sort of goodwill gesture as they are under no obligation to pay you a bonus, unless they receive it from the client.

hiya WTFH, many thanks for your reply. Re the discretion and discussing the completion payment with the client - I was advised by the agency that it is something the client will inform me about - hence, I brought it up with the client at the end of contract. I understand that the client does not has to pay, as their contract with agency is clear. I am seeking a reasonable remedy from the agency, with whom I have the contract, for being negligent. Sigh, I understand your point about lawyers and deep pockets