Contract terms, reasonable or not?

[SueEllen]

So I am left with the choices of either paying for legal advice, or pulling out, or I take a risk and accept the contract in the expectation that the probability of something bad happening is low.

If you pay for legal advice now the agent is extremely unlikely to try and screw you through the contract as they know you will come down on them like a tonne of bricks.

If you don't then they can evoke random clauses if the client screws them around.

I know what I prefer doing.

[TykeMerc]

I finally managed to talk to someone from my insurer but it was a waste of time. They suggested
I seek legal advice which they were not willing to give. They simply said that my policy covered me up to the "duty of care as of law" whatever that means, and they could not comment on whether my contract goes beyond that.

So I am left with the choices of either paying for legal advice, or pulling out, or I take a risk and accept the contract in the expectation that the probability of something bad happening is low.

One problem I have is that my skills are very specialised and this is the first contract offer I've
had since my last contract ended in July! Also I was supposed to be starting work on Monday.

In which case it's a job for common sense and a red pen. Strike out the clauses you hate and negotiate from there.

[amichael]

Those are questions for your insurer, I doubt that they would agree and yes there's a possibility that bad contract clauses could invalidate the insurance on that contract.

I finally managed to talk to someone from my insurer but it was a waste of time. They suggested
I seek legal advice which they were not willing to give. They simply said that my policy covered me up to the "duty of care as of law" whatever that means, and they could not comment on whether my contract goes beyond that.

So I am left with the choices of either paying for legal advice, or pulling out, or I take a risk and accept the contract in the expectation that the probability of something bad happening is low.

One problem I have is that my skills are very specialised and this is the first contract offer I've
had since my last contract ended in July! Also I was supposed to be starting work on Monday.

[amichael]

Perhaps it's best if you get the contract professionally reviewed - these guys are professional bulltulip detectors and will advise you what's OK and what's not.

Also, STOP taking about "me" when you speak of the contract.

You thinking and talking about it like YOU are entering into the contract when you are not. The contract is between your LTD company and the client - not, no way, never between YOU and anyone else. You may be the company director and named as the primary consultant but the contract is always between your company and the client/agent. Do not EVER sign anything that makes you personally guarantee anything.

At the end of the day, they can sue the arse off your company if they want, but you can simply cease trading and they will get nothing as your company will have no assets, so this "unlimited indemnity" clause doesn't mean tulip.

If you personally guarantee something then they can bankrupt you and take everything but the shirt off your back...

Yes of course I meant my LTD company not myself. The contract refers to "the supplier" which is my LTD company.

[Wanderer]

There are many clauses that require me to indemnify both the agent and the client for claims against them that may result due to an undesired outcome that is related to my work.

Perhaps it's best if you get the contract professionally reviewed - these guys are professional bulltulip detectors and will advise you what's OK and what's not.

Also, STOP taking about "me" when you speak of the contract.

You thinking and talking about it like YOU are entering into the contract when you are not. The contract is between your LTD company and the client - not, no way, never between YOU and anyone else. You may be the company director and named as the primary consultant but the contract is always between your company and the client/agent. Do not EVER sign anything that makes you personally guarantee anything.

At the end of the day, they can sue the arse off your company if they want, but you can simply cease trading and they will get nothing as your company will have no assets, so this "unlimited indemnity" clause doesn't mean tulip.

If you personally guarantee something then they can bankrupt you and take everything but the shirt off your back...

[SueEllen]

Thanks all for you feedback so far.

My biggest concern is still this matter of 'indemnifying'. The agent refuses to badge on it.

There are many clauses that require me to indemnify both the agent and the client for claims against them that may result due to an undesired outcome that is related to my work.

Some of these include, negligence, loss or damage of property, any claims by third parties due to infringement of Intellection property rights, any proceedings by HMRC, and so on.

I have taken out both Indemnity insurance and Public liability insurance.

I have two main questions on this:

1. Does the insurance fully cover me for any such claims, even though a party is suing the agent or client rather than myself, with the agent or client then expecting me to compensate them as per the clauses in my contract?

2. Any chance that by agreeing to these terms in the contract I may in any way invalidate the insurance taken out for these?

If you get a lawyer involved the agency will budge.

Simply because the lawyer will tell them what clauses are likely to be enforceable and what won't. Plus redraft them so for example that the client indemnifies your company if one of your employees does something with their say so which later turns out to be illegal. (Obviously it's a different matter if your employee is judged as should have been able to understand at the time what they were doing was illegal.)

[TykeMerc]

1. Does the insurance fully cover me for any such claims, even though a party is suing the agent or client rather than myself, with the agent or client then expecting me to compensate them as per the clauses in my contract?

2. Any chance that by agreeing to these terms in the contract I may in any way invalidate the insurance taken out for these?

Those are questions for your insurer, I doubt that they would agree and yes there's a possibility that bad contract clauses could invalidate the insurance on that contract.

[amichael]

Thanks all for you feedback so far.

My biggest concern is still this matter of 'indemnifying'. The agent refuses to badge on it.

There are many clauses that require me to indemnify both the agent and the client for claims against them that may result due to an undesired outcome that is related to my work.

Some of these include, negligence, loss or damage of property, any claims by third parties due to infringement of Intellection property rights, any proceedings by HMRC, and so on.

I have taken out both Indemnity insurance and Public liability insurance.

I have two main questions on this:

1. Does the insurance fully cover me for any such claims, even though a party is suing the agent or client rather than myself, with the agent or client then expecting me to compensate them as per the clauses in my contract?

2. Any chance that by agreeing to these terms in the contract I may in any way invalidate the insurance taken out for these?

[TykeMerc]

I agree with what Wanderer and the others have said, however I've got a few comments to add.

1. Do NOT agree to indemnify potential claims by both the agent and the client, one or the other. The agency should be indemnifying the client and claiming from your Ltd in the event of an issue. Indemnities should follow the contract chain.

2. Clauses should terminate with the agreement or for a reasonable agreed term after it finishes - Negotiate that.

3. Perfectly normal - Open to negotiation, but most notice clauses are pretty meaningless.

4. No way, no how, get that clause removed - I certainly wouldn't allow them to use my personal information without my explicit instructions and passing it to 3rd parties is right out. If they insisted on that clause I wouldn't agree to the contract.

[Wanderer]

1. I have to indemnify both the agent and the client against a variety of things

Get something straight here, the contract must be between the agency//client and your LTD company (perhaps naming you as the primary consultant). This is NOT a contract that YOU enter into personally. Think of your LTD company as a "person" in it's own right who will enter into the contract.

2. Most clauses of the agreement never terminate, even when the contract has finished.

The clauses are only valid for as long as your LTD company is trading. You can kill it your company off at any time.

3. I have to give 1 month's notice to terminate the contract, but the client can end it immediately without giving any reason.

That's rather one sided but certainly not unusual.

4. They are allowed to use my personal info as they please and even pass it on to third parties.

They are taking the piss here. The reality is that they have obligations under the data protection act and they have to comply with them. I'd call their bluff on this one and ask them what exactly they intend to do with your private information (eg privacy policy). The chances are that they don't intend to do anything with it and they are just being lazy in covering their arse.

[NotAllThere]

If I'm negotiating a contract with you, I'm going to try to make it as much to my advantage as possible. So the agency putting in clauses that you think are unreasonable is perfectly normal.

As far as notice is concerned, consider the reasons behind HMRC losing this: http://forums.contractoruk.com/gener...-employee.html

[TheFaQQer]

Welcome

1. I have to indemnify both the agent and the client against a variety of things

What kind of things? Tax affairs are a common indemnification (i.e. your company is responsible for paying your tax), but without knowing what they want, no-one can say.

2. Most clauses of the agreement never terminate, even when the contract has finished.

Again - what kind of clauses? What are they trying to keep you to?

3. I have to give 1 month's notice to terminate the contract, but the client can end it immediately without giving any reason.

That's not uncommon. Bear in mind that you are paid by the day / hour for the work you do, so even if you had a four week notice from the agency, if they tell you not to go in, then you are in the same situation. Actually, you're in a worse position, because that might stop you going somewhere else in the meantime, just in case they need you.

This one might be negotiable, though.

4. They are allowed to use my personal info as they please and even pass it on to third parties.

Ask for their privacy policy and what that involves. What personal information do they hold about you? They should be dealing with your company / umbrella to put you into the client, so they may not need any personal information.

Are such terms considered reasonable these days and if not is it normal practice to negotiate with the agent to have them adjusted?

Nothing is "normal practice", regardless of what any agent tells you. If you don't like the clause, then negotiate and see if they will change it. If they won't, then you need to determine whether you want to walk away from the work or not. Of course, if you have the client contact details and really want to push it, you could always ring the client and explain that you'd love to take the work because you think it would be interesting and they need someone like you, but the agency won't offer a suitable contract so you won't be able to take it. Agency won't like it, but at least you get to put your side of the story in to the client before they can say anything.

Best of luck.

[strawberrysmoothie]

Hi,

I have recently been offered a contract and the agent's 'framework agreement' is
full of legal language that I am trying to make sense of.

Four areas that are of concern are:

1. I have to indemnify both the agent and the client against a variety of things
2. Most clauses of the agreement never terminate, even when the contract has finished.
3. I have to give 1 month's notice to terminate the contract, but the client can end
it immediately without giving any reason.
4. They are allowed to use my personal info as they please and even pass it on to third parties.

This contract is far tougher on me than I've seen in my previous contracts. Are such terms considered reasonable these days and if not is it normal practice to negotiate with the agent to
have them adjusted?

Regards

A.

You should get this read by a professional and look at IR35 issues. Try Bauer and Cottrell they helped me dodge a particularly nasty bullet last year as the contract seriously nasty clauses.

[d000hg]

2. Most clauses of the agreement never terminate, even when the contract has finished.

Do they actually state that explicitly? What kind of clauses are these, things like "don't give our secrets away" or more mundane?

[amichael]

Hi,

I have recently been offered a contract and the agent's 'framework agreement' is
full of legal language that I am trying to make sense of.

Four areas that are of concern are:

1. I have to indemnify both the agent and the client against a variety of things
2. Most clauses of the agreement never terminate, even when the contract has finished.
3. I have to give 1 month's notice to terminate the contract, but the client can end
it immediately without giving any reason.
4. They are allowed to use my personal info as they please and even pass it on to third parties.

This contract is far tougher on me than I've seen in my previous contracts. Are such terms considered reasonable these days and if not is it normal practice to negotiate with the agent to
have them adjusted?

Regards

A.