Reply to: Clause question in contract

[GillsMan]

Argh, just replied to this topic by mistake. Should have posted here: http://forums.contractoruk.com/busin...ml#post2066186

Sorry for the uber bump!

[SueEllen]

Their definition of a Prospective Customer = any person, firm, company or entity to whom or which, during the period of six months prior to the Termination Date, the Company had submitted a tender, quotation, made a pitch or presentation or with whom or which it was otherwise negotiating for the supply of goods or services or with whom or which a Consultant or Service Company had material dealings at any time during the Relevant Period.
.

That would really work in a court of law...

Sometimes depending on the client it may be worth leaving unreasonable clauses in due to their unenforceability.

[GillsMan]

Worst I've seen is this little number:

The Service company shall not] for twelve months following the Termination Date solicit or endeavour to entice away from the Company the business or custom of a Customer or Prospective Customer with a view to
providing goods or services to that Customer in competition with any Restricted Business or otherwise induce, solicit or entice or endeavour to induce, solicit or entice any Customer to cease conducting, or reduce the amount of, business with the Company.

Service Company = MyCo Ltd.

Their definition of a Prospective Customer = any person, firm, company or entity to whom or which, during the period of six months prior to the Termination Date, the Company had submitted a tender, quotation, made a pitch or presentation or with whom or which it was otherwise negotiating for the supply of goods or services or with whom or which a Consultant or Service Company had material dealings at any time during the Relevant Period.

The Company = The Agency. The Agency = Silverlink Technologies.

Despite the fact the client was dead keen, this was just one of many completely unreasonable clauses and I relatively politely told them to do one and told the Client (a British telecommunications company) why.

[Mephisto]

This sounds like an agency I have had indirect dealings with that put in unrealistic (and totally non-enforceable I would assume going off what NLUK says) clauses to their contracts. One recent assignment saw them trying to stipulate that the contractors under them had to do the following:

a) They MUST use the preferred umbrella company to get paid only - no others allowed and no ltd co. (this preferred brolly were not surprisingly part of the same conglomerate)
b) The contractor cannot contract to the current client or any other client through one of <agency's> competitors upon termination of the contract for 12 MONTHS (effectively meaning you'd have to take a year of contracting completely to not be in breach!)
c) Various other ridiculous hoops to jump through including three separate timesheets, an invoice and a lengthy payment schedule and 'ongoing' referencing (whatever that is)

Luckily mob rule seemed to get a) and b) overturned in the end but not before about 8 contractors had threatened to walk. They really shouldn't have started anyway with such ridiculous terms imposed but no-one had signed and clientco was still keep to get people in sharpish so these guys started with 'good faith'.

Luckily me and a couple of others had come through a different agency who were absolutely fine and who I still use today with no issues.

[DodgyAgent]

Basically if you really take the p**s then the clause is there to protect the agency. If they try to use it unreasonably then they will not get anywhere

[malvolio]

No - opting in gives you the right to return after 8 weeks from the end of the contract or 14 from the start (whichever is later) without needing to use the same agency.

You sure about that? I always thought the period is that in which a charge for returning can be made.

[TheFaQQer]

You sure that isn't to go for perm employment after the contract?

No - opting in gives you the right to return after 8 weeks from the end of the contract or 14 from the start (whichever is later) without needing to use the same agency.

[northernladuk]

Don't sign the OPT OUT document they've no doubt presented you with in conjunction with the contract - if you don't opt out that clause will be null & void (IIUC).

You sure that isn't to go for perm employment after the contract?

[bless 'em all]

Don't sign the OPT OUT document they've no doubt presented you with in conjunction with the contract - if you don't opt out that clause will be null & void (IIUC).

[curtis]

The clause does make it sound that you cannot go back at all, as in the clause that's in my contract it states going back 'Directly' or 'Indirectly' would there therefore not be an added bit that sates 'unless going back with the same agent/supplier' if you can go back in that time as long as it was with them ?

Just seen the 2 posts above after I sent this. This I think was what was confusing me a tiny bit!!

[TheFaQQer]

I think I see your point now; the wording above implies that once the current contract is terminated you can't even get a new contract with the intermediary you're currently contracting with.

I'm sure that's not the intention, this clause would be to prevent you working either directly with the end client, or through some other intermediary.

This.

Ask the agent to read that clause carefully, since it prohibits you going back to the client through them as well. Absolutely not what they intended - they want to stop you bypassing their cut, nothing more than that.

[ContractorsSpouse]

I think I see your point now; the wording above implies that once the current contract is terminated you can't even get a new contract with the intermediary you're currently contracting with.

I'm sure that's not the intention, this clause would be to prevent you working either directly with the end client, or through some other intermediary.

[curtis]

I have read other posts on that clause specifically and understand it might be classed as a restriction of trade.

I've never had a clause for a year in the contract before so keen to get it changed but confusing myself a small bit on the implications that if someone didn't and then decided they wanted it changed later if they did then offer an extension.

I am kind of seeing it as then that's a new contract/schedule and given that clause you would not be able to take it even if I wanted to.

[malvolio]

You can return, but with the same agency. It's called "protecting the revenue stream". However, 12 months is unreasonable unless you are something very special to the client (and not, note, the agency, they can earn their own crust), so probably unenforceable in court. 3-6 months - again depending on your commercial value to the client's competitors - is the practical limit.

[northernladuk]

The latest contract should supersede the last one so if you get it down to 6 months in the extension contract that will be the last agreement. Be prepared for the agency to not back down on this one though. 12 months is unenforceable as is a blanket ban. The handcuff is only valid to cover the agent from loss by you going direct. If you can get in to do some work the agent wouldn't be involved in the handcuff shouldn't fly. The reality of it is there will be a lot of handbags and you might get passed over just to avoid the arguments and threats.

Have a search for handcuff on the forums. Discussed a lot on here.