In the thick of this recession most of us have been confronted with contracts which in essence removes all of our rights as independent contractors.
The most common are:-
1. The client can terminate the contract without notice.
2. The Agent may terminate the contract at short notice sometimes as short as one day notice.
3. The contractor or supplier is only able to terminate the contract on completion of the contract.
And more....
This thread is to attempt to suggest ways which all contractor may follow to present a common front in responding to such contracts. Firstly, what are the laws in our favour?
EU Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts
http://eur-lex.europa.eu/LexUriServ/...3L0013:EN:HTML
Article 3
1. A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.
2. A term shall always be regarded as not individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term, particularly in the context of a pre-formulated standard contract.
The fact that certain aspects of a term or one specific term have been individually negotiated shall not exclude the application of this Article to the rest of a contract if an overall assessment of the contract indicates that it is nevertheless a pre-formulated standard contract.
Where any seller or supplier claims that a standard term has been individually negotiated, the burden of proof in this respect shall be incumbent on him.
3. The Annex shall contain an indicative and non-exhaustive list of the terms which may be regarded as unfair.
This directive is implemented in UK law in "Unfair Terms in Consumer Contracts Regulations 1999". Section 5 of this regulation states what is an unfair term in a contract. It boils down to a contract which has been predefined and presented to you to accept as is. In other words you have not been involved with the drafting of the terms of the contract. According to Article 3 sub section 1, such a contract is unfair since you have not individually negotiated it.
What is your position is this sort of contract negotiation?
The Agency is a supplier of service to you. You the contractor is the consumer. The contract is an opportunity to earn a fee for providing a service to a third party the Client. The cotract is between you the contractor and the Agent.
So what is the proposed approach for responding to such a contract?
You should ask the Agency to remove or alter any aspect of the contract which you consider does not on balance reciprocate the rights that are are stacked against you as a consultant. e.g. Such terms that deny you the right to terminate the contract.
Naturally, the Agency will say this is their standard contract which you must accept or reject. Understandably, by rejecting the contract you would be doing yourself out of hard to find work. Hence what is proposed is that you list all sections of the contract that you are not in agreement with into an email with a statement that "you would sign this contract with the proclamation that the contract was not individually negotiated as your grieviances with the contract as list herein were not addressed".
The significance of this statement is that all terms listed shall not be binding according to section 8 of the "Unfair Terms in Consumer Contracts Regulations 1999".
However, there remains the question of what does this (not binding) mean?
It means that if the Agency has the right to terminate a contract, the rights as stated in the contract in favour of the Agent or Client apply's to you. The Agent cannot enforce the unfair clause against you in a court of law. You must however give reasonble notice of which the minimum is the duration stated for the Agent or Client in the contract.
It is important that IT contractors henceforth follow this procedure so that we may put an end to these unfair contracts.
The most common are:-
1. The client can terminate the contract without notice.
2. The Agent may terminate the contract at short notice sometimes as short as one day notice.
3. The contractor or supplier is only able to terminate the contract on completion of the contract.
And more....
This thread is to attempt to suggest ways which all contractor may follow to present a common front in responding to such contracts. Firstly, what are the laws in our favour?
EU Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts
http://eur-lex.europa.eu/LexUriServ/...3L0013:EN:HTML
Article 3
1. A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.
2. A term shall always be regarded as not individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term, particularly in the context of a pre-formulated standard contract.
The fact that certain aspects of a term or one specific term have been individually negotiated shall not exclude the application of this Article to the rest of a contract if an overall assessment of the contract indicates that it is nevertheless a pre-formulated standard contract.
Where any seller or supplier claims that a standard term has been individually negotiated, the burden of proof in this respect shall be incumbent on him.
3. The Annex shall contain an indicative and non-exhaustive list of the terms which may be regarded as unfair.
This directive is implemented in UK law in "Unfair Terms in Consumer Contracts Regulations 1999". Section 5 of this regulation states what is an unfair term in a contract. It boils down to a contract which has been predefined and presented to you to accept as is. In other words you have not been involved with the drafting of the terms of the contract. According to Article 3 sub section 1, such a contract is unfair since you have not individually negotiated it.
What is your position is this sort of contract negotiation?
The Agency is a supplier of service to you. You the contractor is the consumer. The contract is an opportunity to earn a fee for providing a service to a third party the Client. The cotract is between you the contractor and the Agent.
So what is the proposed approach for responding to such a contract?
You should ask the Agency to remove or alter any aspect of the contract which you consider does not on balance reciprocate the rights that are are stacked against you as a consultant. e.g. Such terms that deny you the right to terminate the contract.
Naturally, the Agency will say this is their standard contract which you must accept or reject. Understandably, by rejecting the contract you would be doing yourself out of hard to find work. Hence what is proposed is that you list all sections of the contract that you are not in agreement with into an email with a statement that "you would sign this contract with the proclamation that the contract was not individually negotiated as your grieviances with the contract as list herein were not addressed".
The significance of this statement is that all terms listed shall not be binding according to section 8 of the "Unfair Terms in Consumer Contracts Regulations 1999".
However, there remains the question of what does this (not binding) mean?
It means that if the Agency has the right to terminate a contract, the rights as stated in the contract in favour of the Agent or Client apply's to you. The Agent cannot enforce the unfair clause against you in a court of law. You must however give reasonble notice of which the minimum is the duration stated for the Agent or Client in the contract.
It is important that IT contractors henceforth follow this procedure so that we may put an end to these unfair contracts.
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