Agency saying "made a mistake on the rate", dropping it, wont pay invoice.

[Anoncoward]

I started a new contract a couple of months ago. A rate was mentioned by the end client around offer time, which was pretty poor. They then appointed a agency for me to bill through, who said the rate was actually higher, because the client had factored in employers ni etc, but wouldn't need to pay that as I'm operating via a limited company. Sounded a bit odd, but the client don't hire a lot of contractors, so fair enough. I asked them to check to make sure, they did, and confirmed the rate in an email with the assignment details (the contract with the agency didn't mention the client or rate).

All was well, they paid the first invoice. Now they're saying they made a mistake, the rate should have been lower, and won't pay me the higher rate - they also want to claim back their "error" for the previous month.

Where do I stand? In my mind, I took reasonable steps to confirm this at the start, I've got the assignment email from the person who signed the contract, and my contract is with the agency, not the end client, so the agency should take the hit (unless they can sort it out with the client, but either way, not my problem).

Has anyone any similar experiences and how did you resolve it?

Anoncoward.

[Cirrus]

There is no contract unless there is a definition of consideration. In other words there must be something that refers to how much you are going to be paid even if it is via a separate appendix.

From what you have said, it would seem you have a proper contract at £X and the agency is trying to backtrack. This happens in business. You're not the first or only person where one party wants to change the terms of the contract.

It's up to you. Reject it or accept it.

[Anoncoward]

There is no contract unless there is a definition of consideration. In other words there must be something that refers to how much you are going to be paid even if it is via a separate appendix.

From what you have said, it would seem you have a proper contract at £X and the agency is trying to backtrack. This happens in business. You're not the first or only person where one party wants to change the terms of the contract.

It's up to you. Reject it or accept it.

Thanks. I'm hoping to negotiate some kind of middle ground figure with them, and get my work to date paid at the old rate (well, really I'd like to stay on the old rate, but I suspect that's not going to happen). Apart from this, it's a decent contract and I'd like to stay, but not if it means a massive rate cut when I've other irons in the fire.

Let's see how it goes, will talk to them more today.

[TheCyclingProgrammer]

Not only does it sound like you had a valid contract at £X/day but it seems pretty clear to me that agency has accepted that rate by accepting and paying your first invoice. They have absolutely no recourse over reclaiming their "overpayment" on the first invoice IMO because you have billed them at the contracted rate. They are trying it on.

Having now told you they have made an error they are certainly entitled to renegotiate the rate and you're entitled to say no. The only recourse they would then have is to terminate your contract in line with the notice provisions in your contract. How much they are willing to do this I would say depends a lot on how things are between you and ClientCo and how much the agency wants to risk pissing them off by having to find a replacement for you.

If things are going well with ClientCo I'd be considering telling them to stick it. They agreed a rate and if it's the wrong one they will have to take the hit on their cut or get rid of you.

[NotAllThere]

I'd ask them to prove that they made an error and aren't trying to pull a fast one - either trying to increase their margin, or they told you porkies in the first place to get you on board.

If they genuinely made an error, then renegotiate the contract. If you can't accept a lower rate, then walk away.

[LondonManc]

I'd ask them to prove that they made an error and aren't trying to pull a fast one - either trying to increase their margin, or they told you porkies in the first place to get you on board.

If they genuinely made an error, then renegotiate the contract. If you can't accept a lower rate, then walk away.

Pretty much this. Agent might have got a kicking from his boss and is trying to pull a fast one. I'm sure we've all bought something at some point where we look back and wished we'd paid less, but there are times when there's no price promise in place and you simply have to suck it up and deal with it. Even things as daft as filling up the car then two miles down the road it's 2p a litre cheaper.

As others have said, they cannot claim back what they've paid as they've already in principle accepted it by paying you in the first place. Why negotiate with them? Are they threatening to cancel the contract? If they are, then speak to the hiring manager at clientco.

[TheFaQQer]

I'd ask them to prove that they made an error and aren't trying to pull a fast one - either trying to increase their margin, or they told you porkies in the first place to get you on board.

If they genuinely made an error, then renegotiate the contract. If you can't accept a lower rate, then walk away.

+1

You have an agreed contract with an agreed price - their actions show that they agreed the contract with that price (see Brogden's case, but also bear in mind Hartog v Colin & Shields)

If they want to change that, then they need to renegotiate it with you.

[NibblyPig]

I would inform clientco of the situation in case the agent tries to smear your name or similar to provide justification for them letting you go. Politely inform them that you will not accept a rate change. Tell clientco you really enjoy working there.

[FrontEnder]

If you want to remain on amicable terms, then negotiating is fair enough, just remember it's a negotiation, so don't accept the first offer!

I would most definitely be talking to the end client. Hopefully they'll tell you what they're paying the agency and that will then reveal a lot. If it's less than what you're getting then clearly there has been a mistake. If not, then this is seriously dodgy from the agent.

If you are willing to take a cut, I'd be inclined to only accept the agency taking a zero or very small margin. It's their mistake, so they should be the ones who should sallow the majority of the loss.

Definitely need to speak to the client though, if both you and they play hardball, this puts the agent in a very difficult position.

[Anoncoward]

Thanks all for your replies - it's good to see you're all mostly thinking the same as me, it gives me a bit more confidence in arguing my case.

I'm talking to the client, and they seem to be on my side. I suspect there has been a genuine mistake on the agents part, and they're now trying to get out of it. Agent is now trying to say I've never had any details of the assignment or rate, despite the obvious evidence to the contrary. They're refusing to pay my invoices too.

It's like arguing with a brick wall