Unfair Contract

[socialite]

Hi

I signed a six-month contract with digital marketing company for them to manage my PPC campaign. I soon realised that they were no good but I persevered to try and make it work, even explaining to them what they needed to do. I had some success when I took the reins but I was still paying them and they were losing me shedloads of money on the bit they were still (not) managing, so I had to halt it because I was haemorrhaging money with no ROI. That point came two months into the contract. I stopped their access to my account so they could do no more damage but continued paying them for another month before cancelling the direct debit. Now they are coming after me for 3 months worth of management fees (because it is written into their one-sided contract that they can do that) even though they are no longer doing anything for me. They are threatening court action.

I realise that I have been very stupid in being suckered into signing such a one-sided contract in the first place, is there any point in me fighting it? I believe they are scammers but the anxiety of it all is affecting my health and I am wondering if I should just pay up for the sake of my health. They are bullies. I know I can't ask for advice, but does anyone have any similar experience and or have any idea what is likely to happen? They have sent a Letter Before Action - that does not fulfill the legal criteria, and they are coming after me personally rather than my limited company.

Thanks in advance for any help

 

[Chris Ashdown]

They are likely to win as you signed a six month contract with them and unless you can prove they are in default on some part of the contract which may well be impossible then I would suggest you pay them and learn the lesson

If you fight them they will say something like you never gave them enough time to see the benefit of their work or something similar, which is unable to disprove

Sorry i cannot give a more hopeful answer

 

[socialite]

OK Chris, thank you for your reply.

 

[Mr D]

If its a company debt then you don't owe it. Your company does.
They'd have to have a personal guarantee from you for the debt before they could take the money from you personally. Did you sign a personal guarantee?

 

[socialite]

It's not as if I have had a service that I am not paying for. I have paid them for three months worth of service even though they did very little. The money in dispute is for the next 3 months which they have not and are not going to do any work for - so they haven't lost anything. It's very different from having received goods or services that I haven't paid. It's a debt for something I haven't had. Having said that, I was paying them from my Ltd company account by direct debit, and I simply stopped the direct debit and that is why they are suing me. There was no need for a personal guarantee of any kind. My company is solvent.

 

[Mr D]

It's not as if I have had a service that I am not paying for. I have paid them for three months worth of service even though they did very little. The money in dispute is for the next 3 months which they have not and are not going to do any work for - so they haven't lost anything. It's very different from having received goods or services that I haven't paid. It's a debt for something I haven't had. Having said that, I was paying them from my Ltd company account by direct debit, and I simply stopped the direct debit and that is why they are suing me. There was no need for a personal guarantee of any kind. My company is solvent.

Business contracts are not the same as consumer contracts and do tend to be harder to get out of.
Not impossible but do tend to be harder or more expensive.

What will you do if they start CCJ action against the company?

 

[socialite]

To be honest, I am inclined to pay up and get my life back. I have a bad heart and this is making me really ill, but my partner (co-director) will be furious if I pay as these people are scammers. It will cause a major upset in our relationship and I fear that also. Nevertheless, I was foolish to sign the contract and I should have known better and I guess I deserve to be punished for that.

My partner says that if they start a CCJ against our company, we just dissolve the company! After this I have no appetite to continue the business anyway.

 

[Alan]

and they are coming after me personally rather than my limited company.

Sounds like that is wrong from your description.

I'm not sure what the right legal advice is here, others will, but my inclination is:
1. to write back to them with a copy of the contract showing the company is who is contracted.
2. write back to them with any material breach of contract you can see ( or potentially see ) from their part ( no idea as I haven't seen what their obligations are )

The problem here, is with hind sight, you have should have started to negotiated your way out before stopping their access, by picking holes in their services and frankly either become a painful customer they want to get rid of or find contractual failings on their part.

It may still be possible to be able to offer them a settlement, maybe tell them ( from your limited company ) why you terminated their access and make them an offer ( say 1 months fee ) to settle 'out of court'. As far as I understand ( which is limited ) any negotiation will be seen favourably and taken into consideration if it ever gets to court.

 

[socialite]

That sounds very sensible.

The problem I had with trying to negotiate my way out before stopping access was that I was blocked by my account manager from reaching anyone higher up in the organisation. The company doesn't have any complaints procedure or anything in the contract which states what happens if THEY don't comply.

I am going to do as you say. Write to them (I'm getting emails from "Accounts" so that is who I will respond to) and explain I represent a limited company. The contract is with the company although I signed it - and payment did come from the Limited Company not me personally.

I will give them a whole list of things they were supposed to do under the contract but didn't. I have emails to back it all up. Then I will suggest they keep the money that I have paid ( I paid them a month's fees after I stopped their access - so they've had a month's fee for nothing) but that I don't pay them anymore. This will be my offer. Then, if they want to pursue it with a summons, then I will issue a counterclaim for all the money I have paid, plus the money they lost me, plus costs etc. Then if the CCJ goes against me, I dissolve the company, having emptied the bank accounts first (the company owes me money).

I think if I offer them any more - say another month's fees - they will see that as weakness and they are out for blood!

The alternative is to just pay them now and save the hassle, but I think it is worth making this offer and see what happens as I can always pay them at any stage after proceedings have begun.

Thanks for your help.

 

[Mr D]

Then, if they want to pursue it with a summons, then I will issue a counterclaim for all the money I have paid, plus the money they lost me, plus costs etc. Then if the CCJ goes against me, I dissolve the company, having emptied the bank accounts first (the company owes me money).

.

And that is known as an illegal preference. What happened to treating creditors equally?

 

[socialite]

Some creditors are basically crooks - so not all creditors are equal.

 

[socialite]

We are talking hypothetically - I'm hoping it won't come to that.

 

[Mr D]

Some creditors are basically crooks - so not all creditors are equal.

Agreed some creditors are crooks. Doesn't change your duties.

 

[Alan]

If the company owes you money, take what is owed BEFORE starting proceeding as there is no other creditor at the moment.

 

[Paul Kelly ICHYB]

What haven't they done that was in the contract you signed?

 

[obscure]

What haven't they done that was in the contract you signed?

This ^^^^
I will bet that they have performed all the actions required under the contract but the results are not what you wanted. I also bet the contract states that there are no guaranted results. In short they loved their arse so you can't win if it goes to court.

 

[Mark T Jones]

I think it is important to deal with facts rather than emotions.

The fact is that you signed a contract of your own free will

Was that contract in the name of the ltd company?

Are you certain there was no pg in it?

Have they performed under the terms of the contract?

If you write to them (I agree you should) then write to their MD. it’s pretyy easy to get this information

If it goes to court, it’s anybody’s guess which way judgement will go - and they know this.

What sum of money are we talking about?