Contract Clauses

[explorer]

Some of the clauses in a new contract that has been offered to me are making me a little uncomfortable. Thought of checking board's opinion on them, and whether it's a norm to have them in a typical contract.

XXX: Agency
Supplier: MyCo

The Supplier does not have the right to terminate this agreement.
xxx shall have the right to terminate this agreement immediately by written notice to The Supplier served by xxx no later than 30 days after the commencement date of this agreement if, in the reasonable opinion of xxx, The Supplier and/or any of their representatives (The Consultant(s)) fail to provide The Services to a satisfactory standard. The Supplier is unable to give notice to terminate this agreement.

The Supplier has to maintain a professional indemnity insurance policy for that (fully indemnify xxx against any loss claim or damages including all costs arising from any breach of this agreement or any negligent or unlawful act or omission by The Supplier) purpose;
Ques: Does that mean I necessarily have to maintain an insurance policy?

without charge correct any defective works carried out by The Supplier provided that such works are notified to The Supplier by xxx on or before The Contract Term End Date.

xxx‘s liability to pay The Supplier is conditional on xxx receiving and being entitled to receive full payment for the relevant period from The Client.

xxx shall be entitled to deduct or reduce monies entitled to The Supplier at their discretion in the event that The Client withholds monies for any reason.

The Supplier Warrants that it has identified to xxx the person to be engaged by the Supplier for the purposes of performing this contract on its behalf as The Consultant and that The Consultant has been so engaged for a period of not less than the Contract term and shall undertake the work required using the required specialist technological skills and expertise by this agreement;
Ques: Inside IR35 pointer??

Thanks in advance..

[malvolio]

xxx‘s liability to pay The Supplier is conditional on xxx receiving and being entitled to receive full payment for the relevant period from The Client.

is unenforceable if you are opted in, and very bad business if you are not, and...

xxx shall be entitled to deduct or reduce monies entitled to The Supplier at their discretion in the event that The Client withholds monies for any reason.

is simply unacceptable. You get paid for work done at the agreed rate at the agreed timescale. Both these clauses should be deleted.

The Supplier Warrants that it has identified to xxx the person or persons to be engaged by the Supplier for the purposes of performing this contract on its behalf

will avoid the element of personal service.

The rest of it is pretty much OK, IMHO, but you could always get it professionally reviewed.

[explorer]

The rest of it is pretty much OK

Thanks Malvolio.
Do you mean it's normal for an agency to reserve the right to terminate the contract any time by giving a written notice to that effect, whereas I cannot do so by any means. Meaning zero notice period from the agency's side, and infite at my end?

I have not, until now, specifically choosen to opt-out. My understanding is that I'm opted in by default, and can't opt out now, even if I wish to..Is that correct?

[RichardCranium]

Some of the clauses in a new contract that has been offered to me are making me a little uncomfortable.

You read the contract!

You thought about it!

You've decided to seek advice.

I like you. You're special.

The Supplier does not have the right to terminate this agreement.

I HATE non-termination clauses. Twice they have made my life a misery. There is mixed advice re IR35 as to whether they are good or bad. In my experience, try to get some sort of notice period in there, even if it is a month. Your life can go wrong.

xxx shall have the right to terminate this agreement immediately

Personally, I have no problem with this. Others will disagree.

The Supplier has to maintain a professional indemnity insurance policy for that (fully indemnify xxx against any loss claim or damages including all costs arising from any breach of this agreement or any negligent or unlawful act or omission by The Supplier)

Fine. Not uncommon in some sectors. Add the cost of the premium (only a few hundred quid) to your daily rate.

Does that mean I necessarily have to maintain an insurance policy?

It would be a stupid way to be in breach of contract; it is cheap.

xxx shall be entitled to deduct or reduce monies entitled to The Supplier at their discretion in the event that The Client withholds monies for any reason.

STOP! Now you need an expert.

egos is expensive, but very, very good. He is an IT contracts law specialist. I have used him and was happy with the advice.

If you are in any professional bodies, most can provide free legal advice. I think you needs some.

The Supplier Warrants that it has identified to xxx the person to be engaged by the Supplier for the purposes of performing this contract on its behalf as The Consultant and that The Consultant has been so engaged for a period of not less than the Contract term and shall undertake the work required using the required specialist technological skills and expertise by this agreement;
Ques: Inside IR35 pointer??

I am not an expert, but it sounds like it to me. Get advice from an IR35 specialist.

[SueEllen]

Thanks Malvolio.
Do you mean it's normal for an agency to reserve the right to terminate the contract any time by giving a written notice to that effect, whereas I cannot do so by any means. Meaning zero notice period from the agency's side, and infite at my end?

Yep you can have business contracts like that.

I have not, until now, specifically choosen to opt-out. My understanding is that I'm opted in by default, and can't opt out now, even if I wish to..Is that correct?

If you have been introduced to the client then you are opted in.

However I suggest you try and negotiate better business terms.

Lawyers aren't cheap and that's what you may need to convince the agency that they have to pay you. If you settle out of court the other side doesn't have to pay any of your expenses.

[thunderlizard]

Do you mean it's normal for an agency to reserve the right to terminate the contract any time by giving a written notice to that effect?

It is, but the odd thing is that they haven't done that in your case. Their right to terminate stops after 30 days, unless it's mentioned elsewhere that you haven't quoted.

[malvolio]

Just to be clear, it's no use getting worked up about zero notice clausess from the client side. For one thing, it is good for IR35, if only in a small way. For another, they can drop you immediately on any one of a dozen pretexts anyway, and finally they are under no obligation to pay you if there is no work they want you to do.

Accountax's view is that they are not the best idea in the world, and the best compromise is assymetric notice periods, say a week from them and a month from you. But if it's the difference between getting the gig and not getting it, it's really not worth worrying about.

[Pacciae]

Just to be clear, it's no use getting worked up about zero notice clausess from the client side. For one thing, it is good for IR35, if only in a small way. For another, they can drop you immediately on any one of a dozen pretexts anyway, and finally they are under no obligation to pay you if there is no work they want you to do.

Accountax's view is that they are not the best idea in the world, and the best compromise is assymetric notice periods, say a week from them and a month from you. But if it's the difference between getting the gig and not getting it, it's really not worth worrying about.

Get Egos or Accountax to check it, they are qualified to give this type of advice.

[thunderlizard]

no-termination clauses come in 2 kinds:
(1) The kind that the client doesn't especially want, and probably doesn't even know about and would be surprised to find out about, but is just there to save the agent the work of replacing you if you quit;
(2) The kind that the client does want, for continuity reasons.

(1) is easy to get changed; (2) you can charge extra for.

[malvolio]

Get Egos or Accountax to check it, they are qualified to give this type of advice.

Ermmm... That actually is Accountax's advice, in answer to exactly that question on the PCG fora a while back. I don't just make this stuff up, you know...