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J. Deans

Contract Terminated!
« on: July 07, 2007, 12:45:39 pm »
I started a cleaning contract for the communal area of a small block of flats, for a management company in May of 2006. I have limited written confirmation of the contract. In other words, no real contract details - except confirmation of acceptance of tender etc.

In October I took them, through small claims online as I had recieved no payment from them. This was settled in full (including court costs) and I continued happily with the contract and got paid on time from then on.

Then, on 22nd June 2007 (13th month) I recieved a letter from them stating that they had sought, and found, a more competetive tender for the cleaning. It was a formal notification for me to cease my services on 31 July 2007 (over 30 days notice)

At no time during the previous 13 months were my cleaning standards brought to account. No complaints were ever recieved. No mention was ever made that my price was too high and I was never asked to review my price.

My question comes in three parts:

1. Can they seek, and employ anothers' services on the basis of 'price' alone without giving me the opportunity to review/renew my tender as well?

2. I recieved the (dated) notification during the 13th month. If a standard contract is 12 months, have I legally started a new 12 month contract with them?

3. If the answer to the above is yes, am I entitled to insist that the contract term is fulfilled - or, am I entitled to compensation for 'loss of earnings' for the remainder of the contract?

I have tried to lookup this information on the internet and it is a minefield!
I just paid £12 for this answer from a supposedly 'online legal firm'

"Dear Sir,

Somebody whose contract fell due and whom it continues to work beyond that this, it is a tacit renewal of the contract.
In case of inequitable redundancy, the law distinguishes two cases as the procedure of redundancy was or not regular. First case: the procedure was respected but the motivation of the redundancy is insufficient to justify it. The law envisages then two measures to repair your damage. First of all, it is possible to obtain your reinstatement within the company or receive allowances from it."

They then go on to say that you need to phone them (at £1.50 p/m) for the complete answer!
So, as you can see, I don't want to try that again!

Any suggestions, gratefully recieved - especially if it points to legislation that I can quote to this management company.

Thanks in advance...

cavanagh_matthew@y

  • Posts: 113
Re: Contract Terminated!
« Reply #1 on: July 07, 2007, 05:48:44 pm »
if you didnt have a written contract, then they can basically terminate the contract at any time with given warning say 30 days, Always get contracts in writting, take it as a lesson learnt.

Robert Parry

  • Posts: 535
Re: Contract Terminated!
« Reply #2 on: July 07, 2007, 05:54:41 pm »
Before you even get your first client you should have gone to see a specialist commercial solicitor to have him draw up your contracts, terms and conditions of business etc, etc.

Regards,

Rob
A world of difference....

J. Deans

Re: Contract Terminated!
« Reply #3 on: July 07, 2007, 09:22:49 pm »
Thanks so far, guys.

My understanding is that a contract is a contract, whether written or verbal.
A verbal contract is as legally binding as a written one.
A written contract simply puts things into much finer detail.

However, as I have written confirmation of acceptance of my original tender, I have a basic written contract.
Anyway, the law seems to recognise both types of contract.
So, as to them being able to terminate a contract simply because it isn't in writing - I'm not so sure.

The point, is the situation as it stands now.
What I am hoping for is, help with the original question(s)

Cheers...

Art

  • Posts: 3688
Re: Contract Terminated!
« Reply #4 on: July 07, 2007, 09:37:07 pm »
1. Can they seek, and employ anothers' services on the basis of 'price' alone without giving me the opportunity to review/renew my tender as well?

2. I recieved the (dated) notification during the 13th month. If a standard contract is 12 months, have I legally started a new 12 month contract with them?

3. If the answer to the above is yes, am I entitled to insist that the contract term is fulfilled - or, am I entitled to compensation for 'loss of earnings' for the remainder of the contract?

If you have nothing signed from them in writing when you started the contract, then your fighting a lossing battle and personally i'd put it down to experience.

1. I'm not to sure about it being a legal requirement, but normally your asked to retender, but you still might not get the contract even if your the cheapest.
2. There's no such thing as a standard contract.



heritagecleaning

  • Posts: 713
Re: Contract Terminated!
« Reply #5 on: July 07, 2007, 09:41:19 pm »
"My understanding is that a contract is a contract, whether written or verbal.
A verbal contract is as legally binding as a written one.
A written contract simply puts things into much finer detail."

Yes, you're right about all that, but it comes down to what you can prove at the end of the day, especially if it comes to court.


Owen


Prestige1

  • Posts: 332
Re: Contract Terminated!
« Reply #6 on: July 07, 2007, 09:50:56 pm »
Is it worth the hassle? the time its taken you to do all the things you've done you could of found other jobs to replace it. its a merry go round I lose a job to fred and then fred losess one to me. if the contract involved 2 or 3 staff and was worth a couple hundred a week then try and fight but I don't thinik you would win unless you had a signed contract. my advice would be move on. regards Phil
Who Dares Wins

J. Deans

Re: Contract Terminated!
« Reply #7 on: July 08, 2007, 01:37:09 am »
Art.
Thanks for that.

1. Excactly 'what I am not sure about' is the answer I need!

2. What do you mean by ' there is no such thing as a standard contract'?
My understanding is that, in English Law, a contract runs for 12 months - unless otherwise, specifically stated  - ie: A temporary contract of a set duration (Job-and- Finish) - or - A long term 'indefinate' contract (Also, Job-and-finish) Either way - a 'Negotiable - Legal (written-or-not) Contract'

Heritage.
I proved (sucessfully) that they owed me 5 months money in the County Court - and that was upheld on the basis of the scant written confirmation of 'Acceptance of Tender' that I hold. So that seems OK.

Prestige1.
Yes! It is worth the hassle!
I am not doing work for 'Fred'
I am a business. I am not out to do work for nothing.
I would not happily lose 'A couple of hundred a week'!

I am looking for constructive advice on this topic - please!

The Great One

  • Posts: 12722
Re: Contract Terminated!
« Reply #8 on: July 08, 2007, 07:48:15 am »
HI

Call the FSB.

If you are not a member, become one. They offer free legal advice.

Regards
Martin 8)

PHILC

Re: Contract Terminated!
« Reply #9 on: July 08, 2007, 08:51:25 am »
Am i right in saying the original contract was only for 12 months?
If so I am pretty sure they can do what they want with regards to bringing someone else in on the 13th month without giving you the chance to re-tender.They should give you 30 days notice.
To be honest I dont think youd have a leg to stand if your original contract was only for 12 months.

The best thing to do next time is start looking at renewing any 12 month contracts around month 9-10
as then you will have plenty of time to find out whether or not your going to get it.




Fox

  • Posts: 824
Re: Contract Terminated!
« Reply #10 on: July 08, 2007, 09:34:02 am »
Hi

Question 1:  Yes the company can seek and appoint another contractor without telling you or asking you to retender

Question 2:  Without a written contract stating the terms of notice you will fall into the catagory of 'reasonable' notice, as you have had this contract for only one year one months notice will be deemed as reasonable.  Contracts are usually for a set time or rolling, (we use rolling which means it is automatically renewed) again without a written contract it would be deemed a set contract so without a new signed agreement after the first 12 months there is no contract as such.

Question 3:  Answered by 2!

Basically you don't have alot of rights on this matter, the biggest problem is not having the 'finer details' in a written contract.  A verbal contract is just a standard contract and only covers legally to a certain extent.  This sounds like it may be a pretty costly lesson for you, but next time make sure have a signed contract.  Even if you use a rolling contract they can terminate at any time giving 3 months notice and don't have to complete the year.

TUPE would apply to your staff with the change of contractor so make sure they are aware of that.

Hope this has helped somewhat.

Fox

Robert Parry

  • Posts: 535
Re: Contract Terminated!
« Reply #11 on: July 08, 2007, 12:56:43 pm »
Fox is correct on all counts, just because you land a contract does not mean the client has to stick with you forever, in fact 60% of contracts change hands every year, it is called capitalism.

From what you have said they have given you 30 days notice, that is all they are required by law to do. TUPE may come into play as Fox has stated, all clients have a choice on who to do business with, management companies are notorious for accepting low quotes, this increases their own profits, this is the way business works, its not personal!

You also did yourself no favours by taking them to court, although from what you have said, you did the right thing, dont worry about it too much, this is nothing new, and will happen again and again.

You failed to follow basic business procedure, you failed to ensure that the contracts that you issue to prospective clients are in fact legal and comprehensive, you lost the battle of the forms, then when they give you notice, you spend money on a useless telephone helpline, why?

If you had your contract drawn up along with your terms of business, at a cost of approx £1000 +VAT, the client would have been forced to issue you with 3 months notice, you then could have spent that time looking for a replacement contract or tried to cut a new deal with your client, the price of doing business is not cheap, you can search the net for all the advice you want, but if you cant or wont spend either the time or the money on obtaining advice from the professionals in certain aspects of your business, well, it is only a matter of time before it all goes Txxx up.

The only difference it would make in this case, is the length of notice that your client had to give you in writing, no contract will allow you to insist that they only employ your company.

However, if you had employed a specialist to write your T & C, and your contract, I think it highly unlikely, that they would have made you wait for payment for 5 months in the first place, then perhaps you would still hold the contract, I would guess that someone has B******** the person who awarded you the contract for the extra costs that they had to pay due to the court case, this money would not have been able to be passed onto the tenants, it would have had to come direct from the management company, management companies do not like to lose money ever!

Of course it could be that your standards were not quite high enough, or some other reason, but it makes no real difference, after all your only a cleaner to them, however, if they employed one of the bigger companies, who have their contracts drawn up by professionals, I dont think they would have withheld their money for 5 months, because the penalties for doing so would have been made quite clear in their contract.

Cleaning is a business, business has real costs, some people rely on obtaining R/A, M/S, Employment Contracts, all off the net or forums, then moan when they find out that they are not worth the paper that they are written on, if you do not act professional at all times, then clients will always, push and push until you go over the edge, would your client have tried to do the same to BT or any other service provider, I think not, one very simple reason, a decent contract, backed up by the law.

Regards,

Rob
A world of difference....

cavanagh_matthew@y

  • Posts: 113
Re: Contract Terminated!
« Reply #12 on: July 08, 2007, 03:35:08 pm »
ye mate get with the ways of business, if its not in a written contract you dnt have a leg to stand on.The good old days of hand shakes and and smile are gone, have to have contracts in writting.

D woods

Re: Contract Terminated!
« Reply #13 on: July 08, 2007, 04:28:09 pm »
Wow

J. Deans

Re: Contract Terminated!
« Reply #14 on: July 08, 2007, 07:44:26 pm »
Supreme, Fox and Robert.

Thank you for taking the time to provide such lengthy answers and good advice.

To be honest, this is just an exercise in learning more about business.
The contract and the situation is real - but it is only worth just over £2k per year.
Losing it, is only of minor importance.

I take note of using professionals to draw up contracts etc. But to pay £1k for a £2k contract may be a bit much.
Normally we deal with large developers who have their contracts, T&C's etc. pretty well sewn up - there is little a contract of our own making would achieve - in fact, it could be viewed negatively when tendering.

One thing that I am still unclear about:
I mentioned that the contract was into it's 13th month. Lets assume I had all the 'perfect' paperwork in place for an initial 12 month contract. Is it not true then, that it becomes a 'rolling' contract when my services are automatically carried on into the next year - with or without a review?

If this is the case, then 3 months notice was mentioned by Fox!

Thanks again...

Robert Parry

  • Posts: 535
Re: Contract Terminated!
« Reply #15 on: July 08, 2007, 08:01:26 pm »
It is only a rolling contract if that is what is in your signed and dated contract, a professional would have drawn up that sort of contract at your request, it still does not mean that they cant change companies as  and when they like, subject to giving the required notice in that contract.

You say that you deal with big companies that have watertight contracts, well glad to hear it, but there is also the battle of the forms to consider.

The cost of obtaining a professional to draw up your contracts and t & c's is a one time deal, unless the law changes, so yes a £1000 outlay for a £2000 contract is unwarranted, but for 10 contracts at £2000?

As for being viewed negatively by your prospects at tender time, I think it would be viewed as just the opposite, after all their own customers would use contracts, in order to protect their own business interests, cant see how your clients could object to you doing the same, because you seem to be giving your own customers all the power, I think that you may find yourself being stung sometime in the future, business is all about co-operation not conflict, well drawn contracts, mean co-operation and not conflict, as all parties are aware before the start of any work what their own obligations are.

regards,

Rob
A world of difference....

J. Deans

Re: Contract Terminated!
« Reply #16 on: July 09, 2007, 12:30:51 am »
Robert, Great!

I totally agree with you.

But, no offence, you do seem to speaking from a 'moral' perspective.
which, as business people - we can't and, don't do!

Without quoting you here - how does paying 'once' for a 'drawn-up-contract-that-covers-all' help anybody?

If there was a written contract like that - I would gladly pay £1000 - and forget everything else!

Your last paragraph, I have to totally disagree with!
NO business is 'in it' for co-operation!
Sometimes you HAVE to give your '(Clients) ALL the power' - to get the contract!

It's about how you gain yourself, that matters...

Fox

  • Posts: 824
Re: Contract Terminated!
« Reply #17 on: July 09, 2007, 06:07:11 am »
You have one contract drawn up that makes the basis of your agreement with any customer so for example it would state that termination by either party would be three months and that the client has to provide sufficient light and water to carry out the work etc etc etc.  You can then agree on costs, days etc in your quotation or letter of acceptance.

Robert isn't saying that businesses are 'in it' for co-operation just that any working relationship needs to be based co-operation.  No client or contractor wants to be 'under the thumb' but having your own regulations earns you respect and protects your business.  You are more likely to look professional and to be taken seriously at tender stage if you have your own terms and conditions.

Fox


Robert Parry

  • Posts: 535
Re: Contract Terminated!
« Reply #18 on: July 09, 2007, 07:35:13 am »
Thats about the strength of it Fox  ;D

Regards,

Rob
A world of difference....

cml

  • Posts: 181
Re: Contract Terminated!
« Reply #19 on: July 09, 2007, 11:33:55 am »
Intresting!!

and even more..............this

[Somebody whose contract fell due and whom it continues to work beyond that this, it is a tacit renewal of the contract.
In case of inequitable redundancy, the law distinguishes two cases as the procedure of redundancy was or not regular. First case: the procedure was respected but the motivation of the redundancy is insufficient to justify it. The law envisages then two measures to repair your damage. First of all, it is possible to obtain your reinstatement within the company or receive allowances from it."

They then go on to say that you need to phone them (at £1.50 p/m) for the complete answer!
].

Even thought I agree with Fox and Rob I've missed a few bits here

1.   How did you know about the tender?  Was this verbal or in written form because you seam to indicate that there is some sort of part written information in regards to this this?

2.  How did you suceed in small claims case without the conclusion of a contract of some sort to award payment?  What information did you use,  performance, this part written doc, part verbal,  what?

3.   The lawyers?? answer.  You have to excuse me because I need things in plain english.  Reading between the lines he/she would suggest that your contract may have been renewed and is continuing under a rolling period.  Further she goes on to say  by terminating your contract this may not be justifed and if this proves so then your remedies are either reinstatement or damages  (and on this point I am assuming for breach of contract putting you in the position you would have been should you have carried out the term of contract).

So even though a written, verbal or even conduct terms of contract is important and would take you down the lines of both Fox and Rob.  There is no clear cut answer from the information you provide.  This is for the lack of key details.  What is offered and very well explained is an answer base of the information you presented.  On the other hand if there is information supporting a yearly contract and the termination of it is silent I am of the opinion that your lawyer might be suggesting there maybe grounds or supporting arguements to persuade the judge to accept your view on your trading position.

The question is always going to be is it worth it, i.e. weighing up the costs of fighting such a claim and the possible returns if you win.  However if you fail the costs may be detrimental.

Den.