Restrictive clause in contractor agreement

steampowered

Vin82 said:

Hi All,
Thanks for the advise, I have sent the letter before action to the Agency , giving them 14 days of time before go for the Court proceedings. The guy called me and tried to scare me that they have lot of solicitors and all to deal with this. I will just find out a good solicitor for me in case if the agency doesnt pay me in 14 days.
Any further advise will be helpful.

Thanks,
Viny

Well done.

One has to ask - why did he phone you up, rather than responding in writing? I'll tell you why - because he has absolutely no idea what is he is talking about, and is scared stiff of putting something stupid in an email. 

If he had "a lot of solicitors" ready and waiting to deal with this - you'd be receiving a response from them, not a call from this joker. 

I would sit back for now and wait to see what response you get within the 14 days. If you get a positive response, great. If you don't, then you can decide whether you want to sue them yourself or whether you think a solicitor is required.

Vin82

Hello,
In response to my LBA , the agency has sent similar LBA and asking me to pay 12 weeks of fees 36k as fine. Are they not trying to put penalty on my ltd company ? 
because the contract was with Agency - my ltd company .    I was working with the client and my ldt company was invoicing to Agency . Agency invoicing to client.  Finally my ltd company was getting paid for the services as per the invoice. The agency was getting the commission ( so this commission should be their fees ) but they are claiming the complete amount of an invoice raised by my ldt company as their fees.
Is this legal ?

Please help me to understand this.
Thanks,
Viny 

General_Grant

Vin82 said:

Hello,
In response to my LBA , the agency has sent similar LBA and asking me to pay 12 weeks of fees 36k as fine. Are they not trying to put penalty on my ltd company ? 
because the contract was with Agency - my ltd company .    I was working with the client and my ldt company was invoicing to Agency . Agency invoicing to client.  Finally my ltd company was getting paid for the services as per the invoice. The agency was getting the commission ( so this commission should be their fees ) but they are claiming the complete amount of an invoice raised by my ldt company as their fees.
Is this legal ?

Please help me to understand this.
Thanks,
Viny 

And your LBA was sent as a claim against the agency on behalf of you or the company?

Vin82

I sent it on behalf of my ltd company

nicechap

Vin82 said:

Hello,
In response to my LBA , the agency has sent similar LBA and asking me to pay 12 weeks of fees 36k as fine. Are they not trying to put penalty on my ltd company ? 
because the contract was with Agency - my ltd company .    I was working with the client and my ldt company was invoicing to Agency . Agency invoicing to client.  Finally my ltd company was getting paid for the services as per the invoice. The agency was getting the commission ( so this commission should be their fees ) but they are claiming the complete amount of an invoice raised by my ldt company as their fees.
Is this legal ?

Please help me to understand this.
Thanks,
Viny 

My guess is they charged your rate +25% to the client so a years lost fees (£144k x 25% =£36k).

you need proper legal advice, go see a lawyer.

Vin82

The agency's commission was 5 % , they user to charge My rate+ 5%  to the client.

nicechap

Vin82 said:

The agency's commission was 5 % , they user to charge My rate+ 5%  to the client.

That sounds a very poor mark up, and I'm surprised you would know what they charge. Irrespective, go and see a lawyer.

steampowered

Personally, I would call their bluff, and simply go ahead and issue court proceedings. From what you've said it sounds pretty clear that you are in a strong position here. 

No harm in getting a bit of sensible legal advice before you press the button on that, if you feel it necessary.

If the contract is between the agency and your LTD company, as you say, then that puts the agency in an incredibly weak position - since in the unlikely event you lost the case, the company would (presumably) have no assets left to pay the agency, and you'd just fold it. Most likely they've addressed the LBA to you personally simply in an attempt to intimidate you. 

The quick "tit for tat" nature of the response to the LBA, apparently without actually responding to your LBA, and mis-addressing of it suggests to me that the person dealing with it is a bit of a chancer, rather than someone who knows what they are doing. I could be wrong but based on what you've said I'd be surprised if they actually have a "compliance department".

Vin82

Hello ,  The LBA is addressed to my ltd company. 

steampowered

Vin82 said:

Hello ,  The LBA is addressed to my ltd company. 

Ah, thanks for clarifying. That's good news for you.

In that case there is even less need to hesitate to sue the agency through the moneyclaimservice if that's what is needed to get paid - suing in the name of your company as the contracting party. If you win (which sounds highly likely), you get paid. Even if you were to lose, you could simply fold the company (I assume the company has no assets and has paid out all of its earnings to you) and set up a new one for ongoing engagements with the client.

It sounds like the agency is seeking to claim the "contractual fines" you mentioned in your post on the first page on this thread? As I mentioned on the first page, it is extremely doubtful that those "contractual fines" are legally enforceable because:
- They are "penalty clauses" - which the court's don't enforce.
- They are unreasonable "restraints of trade" - which the courts also don't enforce.