Sharp practice by Computer Staff Agency

[TomKe]

A colleague was telling me about a problem he had. He had worked in Switzerland for 2 months through a UK Agency and he had not been paid by the Agency. Over this time he has self funded a significant amount of expenses. The Agency had inserted a 'Paid when we are Paid' clause into his contract which he didn't notice and had signed. The Director of the agency is aware of the dispute and is relying on the contract clause.

He has invested in a Solicitors letter to the Agency but as we are talking about a £15k plus dispute I don't think they will take any notice of it.

Facts
1. Contractor had worked for the Agency before under their standard payment terms which are 14 day.
2. The end Client the Agency advised when he took the contract was a respected UK business.
3. He was working in Switzerland for 2 days without contract cover.
4. The end Client actually was a Chinese company.
5. The Agency had provided a contractor to the Chinese company earlier in the year and had still not been paid for the contractors work.
6. When he was sent out there was a commercial dispute between the Agency and the Chinese company over the non-payment.
7. The Agency did not make the contractor aware that there were any problems and did not mention that the Agencies standard payment terms had been changed in the contract. The contractor found out about the dispute by speaking to the contractor who had worked earlier in the year and had still not been paid.

Opinion
Of the contracts issued by the Agency I expect that 99.9% of them would use the standard payment terms. The terms were varied in this instance because the Agency knew there was a likelihood of the services not being paid for.

The contractor should have read the contract before he signed it we can all learn a lesson from his mistake. I signed a contract this week for a short contract without reading it. The Agency was reputable and I have worked with them before and so I assumed it would be ok. We were in a rush to start the contract and only soft copies of the contract were sent out by email. Lots of reasons none of which make much sense if you end up in the situation of my colleague.

Question:
What legal redress does the person have?
Miss-representation? the end Client was miss-represented initially.
Fraud? The Directors of the Agency knew there was a high probability that no payment would be made?
Unfair contract term? Deviating from their standard contract which the person had worked under before without mentioning it to the contractor.

My gut feel is that by signing the contract he is stuffed, he has accepted the payment terms.
By continuing to work after he found the end-client was different he is also stuffed as he will be deemed to have accepted the change. The only hope is that a Judge will regard the 'Paid when Paid' contract term as unfair and set it aside.

Opinions welcome.

Kind regards
Tom

[degsie]

I thought that the 'unfair contract terms' protection was only extended to consumers - contracts between businesses (as I assume your friend contracts through a ltd company) were excluded as they are expected to be able to look out for themselves. However, IANAL so hopefully a more knowledgable poster will be along soon.

[Dorn1]

inserted a 'Paid when we are Paid' clause

Our old commercial manager (big plc) always told me that such clauses were outlawed in the 70's as the building trade was suffering with so many sub-contractors going bust for that reason. His contract is between him and the Agency, their problems are not his.
C

[didds]

"The contractor should have read the contract before he signed it we can all learn a lesson from his mistake."

Yes he should have... but if he had read this term and was unaware that the agency's previous contract with the same company hadn't been paid, would that have made any difference ? He would have been signing in the full knowledge of "paid when agency paid" but in good faith that there is every expectation they would get paid.

didds

[didds]

did you get any joy TomKe?

didds