breach of Service Contract

**cojak** · 27 October 2010, 08:40

Wait for 12 months.

Or ignore it and see if they take it to court.

It's possible that they will but probable that they won't. Who knows which way the agency will act?

**NotAllThere** · 27 October 2010, 09:23

Or pay £25K

**SueEllen** · 27 October 2010, 09:37

The question has come up before so do a search.

If you can't be bothered then simply ignore the agency and any threats they make. If they threaten to take you to court I suggest you bother doing the search.

**Wanderer** · 27 October 2010, 11:01

Originally posted by No1UKUser View Post

In the event of breach of this clause,you agree to pay a one time charge of £25k to the Company as reasonable sum for the breach of this clause." How can I go ahead with the new agency Y without paying anything to agency X?

Did you "Opt out" of the agency regulations before you were introduced to the client? If you did not opt-out then an onerous term such as this is unenforceable against your company. Do a google for "opt out site:forums.contractoruk.com" and see what it comes up with if you don't understand this opt-out business. (In my opinion, you should NEVER opt out). Not opting out limits any restraint of trade clause in the contract.

Personally, I think it's bluff and bluster. 25,000 pounds is an outlandish amount which would be a penalty in a civil contract which isn't going to stand up in court.

Also understand the concept of a "Limited Liability company" which means that if your company gets sued (and that's who the agency would have to come after, not you personally) then you can just cease trading with that company and start up with a new one the next day and the court action will amount to nothing. In the unlikely event that they take it to court, they won't be able to enforce a judgement against a company which has ceased trading.

The only real comeback is if the agency go after the client and sue them for engaging you through a different agency. This is a very real possibility and is the normal method for agencies enforcing a restraint of trade such as this. Many times though, the client has no such restriction and they will happily engage you through another agency or they will stand up to the agency and tell them where to go.

I am not a lawyer, that's just my take on it. I'd just sign it and deal with the agency if the problem ever arose. You should get some proper legal advice if they ever try and enforce it.

**amcdonald** · 27 October 2010, 11:11

What does the contract say ?

Is it you personally or your company that can't work for a period of 12 calendar months for xyz company

If the latter, even if opted opt just start a new company, wind down the old one so it has no assets and contract through that

**thunderlizard** · 27 October 2010, 11:37

Is there such a thing as a "contract of services"? i.e. neither a "contract of service" nor a "contract for services". Maybe get a lawyer to look at that bit, because that slapdash bit of confusion might render the thing unenforceable.

**mavster07** · 27 October 2010, 16:10

Actually, just speak to the client HR and explain your desire to go through a different agency. The client won't care as they typically have several on their books anyway. You obviously have your reasons for wanting to do so.

Thats what I did for one client and I switched after 12 months and did another 8 months with another agency.

Another way around it is to get the client to approach you through the other agency and to make the role 'appear' different to what you were doing before. Because its not you approaching the client, you can't be seen to be interfering with an existing contract.

Besides all that, you'll actually find that in 99% of cases that type of clause is a restraint of trade and is unenforceable.

I would just switch agencies and see what the existing agency does. If they make 'noise' simply suggest to them that you'd ask they raise their concerns through the client so that the client can be aware of their intent to cause problems with the contract. Watch how quickly they back away from that one....

All these clauses are meant to do is to stop you from - after a short period - actively looking to short change them on their bit of the contract or to steal business that they would normally have got.

Its all bluff and bluster. Its your contract, you won it - the agency is just the middle man and has to accept the good with the bad.

**mavster07** · 28 October 2010, 08:08

**SueEllen** · 28 October 2010, 10:17

If you have opted-out and the agency threatens to take it to court let them as if you can back up your arguments (a small amount of googling will find you cases) you would easily be able to prove that the 12 month clause is a restraint of trade and also too non-specific.

Then the judge will have to strike out the entire clause as they aren't allowed to amend it.

The majority of agencies are too mean to get their contracts checked by a lawyer so put in a non-specific one year clauses.

As I say do a search on this here as this has been asked many times.

breach of Service Contract