Contractor Questions - Restriction clauses
Discussion
I'm about to leave a contract for another.. all legit and amicable. Original Client wants to continue to use me on an ad hoc basis.
Normally my concurrent contracts are not an issue, but the old client refuses to involve the agent, who are a complete shower of s
te to be honest.
I have a restriction clause in my contract for 12 months, but I'm not sure of its validity.. As far as i am aware the agent have breached other parts of the contract repeatedly in any case.
Normally my concurrent contracts are not an issue, but the old client refuses to involve the agent, who are a complete shower of s
te to be honest.I have a restriction clause in my contract for 12 months, but I'm not sure of its validity.. As far as i am aware the agent have breached other parts of the contract repeatedly in any case.
TSS said:
What is the exact wording of the restriction in your contract?
Thats the key - can the restriction be lawfully enforced.Whether they really annoy client X or not, this has no effect on your contract with them.
Secondly, the factor is how can it detriment you, and what will they do about it?
My way forward would be for the client to pay you what they used to pay the agency. Therefore even if the restriction WAS enforced the worst they could to is sue you for their losses. Even then, you would still not be out of pocket.
JustinP1 said:
TSS said:
What is the exact wording of the restriction in your contract?
Thats the key - can the restriction be lawfully enforced.Whether they really annoy client X or not, this has no effect on your contract with them.
Secondly, the factor is how can it detriment you, and what will they do about it?
My way forward would be for the client to pay you what they used to pay the agency. Therefore even if the restriction WAS enforced the worst they could to is sue you for their losses. Even then, you would still not be out of pocket.
What contract do they have in place with the client? is what you should be asking. It would be highly unlikely that the agent would come after you, after all you are probably a one man band ltd company or via an umbrella, however they may well have leverage with the client based on the contract in place with them.
JustinP1 is right about only being able to claim loss of profit based on a restriction clause, however any decent agency would have an 'introduction clause' in their contract with the client and this could be any amount and not restruicted to loss of profit.
If you are only working ad hoc for the client, they need to be aware of this risk otherwise they could be landed for a large bill which outwieghs the ad hoc nature of the contract.
Jason
Edited by flyingjase on Tuesday 15th April 12:27
Edited by flyingjase on Tuesday 15th April 12:37
The agency would pursue the client rather than you as the contractor. Restriction clauses are in place to stop what you are referring to.
As a contractor you become an asset of the agency so they are entitled to a fee for introductions. End of story. Whether you think they are any or not is immaterial. Otherwise, there'd be nothing to stop client companies contacting agencies and taking a contractor for just a week then employing them direct.
As a contractor you become an asset of the agency so they are entitled to a fee for introductions. End of story. Whether you think they are any or not is immaterial. Otherwise, there'd be nothing to stop client companies contacting agencies and taking a contractor for just a week then employing them direct.
Most people assume that agencies main business is finding contractors and clients - It's not, thats an expense to them. Their main business is ensuring they get paid a percentage of the rate.
As their core business, they spend a lot of time making sure this happens. Their contracts will be watertight, and plenty of contractors and companies have looked at them.
I'm just negitiating a new contract myself and my end clients have had a lawyer look through both contracts and they have advised us to live with it (of course it took them many, many more words to say that).
While the pimps may only be able to sue for loss of earnings, whose to say how much they've lost.
My clients have a 20k buy out clause in the contract, which would presumably be the penalty if we tried to cirumvent the pimp.
Pimps will ring up your clients posing as other people and ask for you, they will ask other contractors how your doing, where your working etc. to "police" the contract.
At the end of the day you, and your clients have signed a contract, to which you both knew the T's & C's. Honour It.
As their core business, they spend a lot of time making sure this happens. Their contracts will be watertight, and plenty of contractors and companies have looked at them.
I'm just negitiating a new contract myself and my end clients have had a lawyer look through both contracts and they have advised us to live with it (of course it took them many, many more words to say that).
While the pimps may only be able to sue for loss of earnings, whose to say how much they've lost.
My clients have a 20k buy out clause in the contract, which would presumably be the penalty if we tried to cirumvent the pimp.
Pimps will ring up your clients posing as other people and ask for you, they will ask other contractors how your doing, where your working etc. to "police" the contract.
At the end of the day you, and your clients have signed a contract, to which you both knew the T's & C's. Honour It.
I'm not sure if this helps - I think it might, up to a point.
One of my client's had such a ballache with an agency I was going through that the agency was removed from the Preferred Supplier List, and at the end of the contract it was suggested that if I pitched for further work (of which there was loads - I know, I planned it!) through said agent, I might not get the gig. It was further suggested that the client was happy to continue dealing with myco through a.n.other agent though. The original agent did all the posturing on restrictive clauses and whatnot, though to be fair myco's relationship with the agency is relatively fine, so I saw no need in messing about with it. The amicable solution was to introduce a 3rd party to the deal (in this case it was Baddenoch & Clark) that the client was happy dealing with, and the agency were happy dealing with.
So the relationship with this client is...
client --> B&C --> original agent --> myco
In this instance, B&C take x% of my co's final invoice value to 'factor' (might be the wrong word) the client to original agent relationship. The client costs haven't changed (which was a stipulation on my part); myco's income hasn't changed (another stipulation). The B&C cost has been swallowed by the original agent and we treat it as a 'pissing the client off tax'. The client is well aware that the original agent is still in the loop, but since they now deal with someone who isn't playing at being an agent, they are fine with it. Kind of shows what a mockery Preferred Supplier Lists are, but there you go
One of my client's had such a ballache with an agency I was going through that the agency was removed from the Preferred Supplier List, and at the end of the contract it was suggested that if I pitched for further work (of which there was loads - I know, I planned it!) through said agent, I might not get the gig. It was further suggested that the client was happy to continue dealing with myco through a.n.other agent though. The original agent did all the posturing on restrictive clauses and whatnot, though to be fair myco's relationship with the agency is relatively fine, so I saw no need in messing about with it. The amicable solution was to introduce a 3rd party to the deal (in this case it was Baddenoch & Clark) that the client was happy dealing with, and the agency were happy dealing with.
So the relationship with this client is...
client --> B&C --> original agent --> myco
In this instance, B&C take x% of my co's final invoice value to 'factor' (might be the wrong word) the client to original agent relationship. The client costs haven't changed (which was a stipulation on my part); myco's income hasn't changed (another stipulation). The B&C cost has been swallowed by the original agent and we treat it as a 'pissing the client off tax'. The client is well aware that the original agent is still in the loop, but since they now deal with someone who isn't playing at being an agent, they are fine with it. Kind of shows what a mockery Preferred Supplier Lists are, but there you go
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