Liability question

[pdr]

Hi and welcome

Yes, it's common for agencies to put this sort of crap in your contract and as you rightly observe it's pretty vague. My opinion is that penalties in contracts like this are pretty much unenforceable in court as they are not "liquidated damages".

The agency puts this there so they can use it to bully the contractor out of money they owe them if there is a dispute. I would allow the clause to stay there but if they ever tried to claim damages from my company then I would put up a hell of a fight, and take the case to small claims court if they wouldn't back down.

Are you trading through a LTD company? Do you understand IR35 and have you had your contract reviewed? (click the links on the right side of the page). For LTD contractors it's well worth doing and getting a legal opinion on the terms in your contract at the same time. If you want to change a contract then you will have a lot more clout if you have a solicitor's opinion behind you than if you are just making requests on you own. I would generally leave clauses like this alone as they are a potential pointer to being outside IR35 (business risk).

Good luck!

Thanks for the detailed response Wanderer. I have my own Ltd company and thought you point about leaving the clause in as an indication of being outside IR35 was a very valid point. Unfortunately, this agent is not REC registered so I think this has given the them the opportunity to add some dubious conditions. Thanks again for the help.

[Wanderer]

Is it common for agents to chase the client for their consultancy loses?

Hi and welcome

Yes, it's common for agencies to put this sort of crap in your contract and as you rightly observe it's pretty vague. My opinion is that penalties in contracts like this are pretty much unenforceable in court as they are not "liquidated damages".

The agency puts this there so they can use it to bully the contractor out of money they owe them if there is a dispute. I would allow the clause to stay there but if they ever tried to claim damages from my company then I would put up a hell of a fight, and take the case to small claims court if they wouldn't back down.

Are you trading through a LTD company? Do you understand IR35 and have you had your contract reviewed? (click the links on the right side of the page). For LTD contractors it's well worth doing and getting a legal opinion on the terms in your contract at the same time. If you want to change a contract then you will have a lot more clout if you have a solicitor's opinion behind you than if you are just making requests on you own. I would generally leave clauses like this alone as they are a potential pointer to being outside IR35 (business risk).

Good luck!

[pdr]

Hi, I have a couple of quick questions for everyone. In the agents T&Cs is the following:-

The Consultancy accepts that agent x has the right to offset any losses sustained as a result of the Consultancy’s
actions, breach or unsatisfactory performance from any payment due to the Consultancy.

I ask as I have been offered a contract however the exact responsibilities have not been defined. If the client has not clearly stated in writing what these responsibilities are and dispense of my services, will I be liable? Is it common for agents to chase the client for their consultancy loses?

Thanks!