Negotiating and Breach of Contract

Discussion in 'Legal' started by Spenda, May 14, 2019.

  1. Spenda

    Spenda UKBF Newcomer Free Member

    7 1
    Good afternoon, would really appreciate some help on an agreement/contract terms and whether my understanding is correct. I will try and summarise as best I can.

    I have an arrangement with a company where I provide services to market and grow their business and develop their brand. Fell into it by chance and the last couple of years has been a steep learning curve for me relative to running a business and understanding the value of what I do. The relationship isn’t fantastic as we have had some differences about the agreement we have in place (they have tried to remove financial incentives as they see the business grow and they also reneged on a promise of shares). Overall, I do a great deal for them but it’s all on a commission structure so whilst the business has been growing the true value of what I have brought, and my time hasn’t really been recompensed at its value. At the beginning I was Ok with it as I thought I had the shares and now I have set some parameters around what I am willing to do for the commission, anything over and above that will be charged as part of my consultancy services going forward (I have done a lot that is over and above my brand development role to help them)

    We have never had a signed contract detailing the expectations for both parties, but we have written terms of how our agreement works and have been working with those terms over the last 24 months, they are high level and mostly cover the financial side of our arrangement. We have no written termination clauses presently.

    They have been trying to renegotiate the terms of our agreement for about six months, mostly everything they have come up with is a detriment to me with no real justification of their proposals and when challenged with data and justification for keeping certain financial incentives to pay for my time/skills they then come up with another proposal.

    So you have a summary of the background, I have put a deadline on getting a revised agreement in place (end of June) as I have also some elements that do not form part of the original agreement (termination clause that includes a notice provision, also a financial severance package at the end of the 3 year contract in absence of the shares)

    My questions are:

    If we can’t reach an agreement, can they refuse to continue with some of the financial incentives in place or would this be a breach of contract? If this happens what should I do?

    I’m thinking that any changes must be mutually agreed and can’t just be implemented. They are keen to get the financials sorted and then work on my termination terms after that but with their track record I want all parts of the arrangement agreed upfront as otherwise it leaves me vulnerable and provides them no incentive to get what I need sorted out.

    If we get into a position where we can’t move on from our respective standpoints, should a reasonable notice period apply in absence of a written termination clause? They agreed in writing some time ago to some sort of residual income at the end of the new contract (this forms part of the termination terms I am looking at) would this still apply in principal under this arrangement if we couldn’t move forward.

    Thanks for your time and apologies for the length of the email.
     
    Posted: May 14, 2019 By: Spenda Member since: May 14, 2019
    #1
  2. The Byre

    The Byre UKBF Ace Free Member

    8,347 3,234
    Nobody can hope to give you a sensible answer without having access to all the documentation, correspondence, etc.
     
    Posted: May 14, 2019 By: The Byre Member since: Aug 13, 2013
    #2
  3. Spenda

    Spenda UKBF Newcomer Free Member

    7 1
    I appreciate that, I was looking for more generic advice on contract breaches, changing terms without mutual agreement and notice periods in absence of a termination clause, perhaps that got lost in translation with my ramble... The paperwork we have in place is literally just bullet points of the financials and nothing around the areas I am asking questions about.
     
    Posted: May 14, 2019 By: Spenda Member since: May 14, 2019
    #3
  4. Newchodge

    Newchodge UKBF Big Shot Free Member

    11,739 3,030
    A contract cannot be changed without agreement. A breach of contract may or may not invalidate the contract. If there is no termination clause there would appear to be no termination!
     
    Posted: May 14, 2019 By: Newchodge Member since: Nov 8, 2012
    #4
  5. Spenda

    Spenda UKBF Newcomer Free Member

    7 1
    So if there is no termination clause could/should a reasonable amount of notice apply? I ask because I have come across differing pieces of info when looking into it but consistently the message is if you have no term clause then there should still be some sort of notice given (unless I guess both parties agree to mutually walk away with no notice)
     
    Posted: May 14, 2019 By: Spenda Member since: May 14, 2019
    #5
  6. WaveJumper

    WaveJumper UKBF Regular Free Member

    374 59
    Ultimately in these cases the sensible option is it's better to reach an agreement that works for both of you, if not and you both decide to part company all well and good.

    At the end of the day if you or the other party stood their ground what are you going to do take each other to court to fight it out
     
    Posted: May 14, 2019 By: WaveJumper Member since: Aug 26, 2013
    #6
  7. Spenda

    Spenda UKBF Newcomer Free Member

    7 1
    Of course the best option for all is to find a happy medium I'm just trying to solicit some advice around those specific areas jus in case things don't work out as planned.
     
    Posted: May 14, 2019 By: Spenda Member since: May 14, 2019
    #7
  8. Engage Legal

    Engage Legal UKBF Contributor Free Member

    73 13
    Be careful. Contractual termination is very nuanced. If you make a mistake in the process it could mean that you are breach of the contract and they can claim against you for damages.
     
    Posted: May 14, 2019 By: Engage Legal Member since: Mar 25, 2019
    #8
  9. MY OFFICE IN CHINA

    MY OFFICE IN CHINA UKBF Big Shot Full Member

    3,935 780
    Were you qualified to provide such services, given the above 2 statements in your opening post?

    My advice is for both sides to provide all the evidence they have to support their case and agree (with a mediator if necessary) on a sensible outcome.

    There are always two sides and often two very different points of view with regards a verbal contract.

    The possibility of not agreeing a fair outcome will be litigation, which may run into thousands in costs for both parties.
     
    Posted: May 14, 2019 By: MY OFFICE IN CHINA Member since: Nov 16, 2011
    #9
  10. Conwaya

    Conwaya UKBF Newcomer Free Member

    4 0
     
    Posted: May 17, 2019 By: Conwaya Member since: Jan 8, 2019
    #10
  11. Conwaya

    Conwaya UKBF Newcomer Free Member

    4 0
    Thank you. Have consulted with a solicitor just in case.
     
    Posted: May 17, 2019 By: Conwaya Member since: Jan 8, 2019
    #11
  12. Engage Legal

    Engage Legal UKBF Contributor Free Member

    73 13
    Good call on the solicitor - good luck.
     
    Posted: May 19, 2019 at 8:30 AM By: Engage Legal Member since: Mar 25, 2019
    #12
  13. The Resolver

    The Resolver UKBF Big Shot Full Member

    3,018 990
    Firstly everybody will gain if mediation is pursued before having solicitors letters sent. They usually, and understandably, provoke an aggressively defensive stance from the others..

    Not having a clear signed agreement at the outset will inevitably result in lawyers on all sides being able to generate arguments that can only delay and make more costly the process going forward. Far better for all sides to consider not the legal rights and wrongs but wherein lie the interests of all parties. These are not always the same. At the end of the day this is a business in which its marketing and resulting sales benefit from your expertise and knowledge. It is understandable that to best gain from that, and for you to be fully committed in the future, they really need you to be comfortable with the return you receive. Identifying the underlying interests of all sides is the starting point from which mediation should commence rather than , as in an earlier form of mediation now less popular, whereby the mediator simply tries to pre-empt how a court would decide the issue and encourage an agreement that reduces the risks for both sides of an adverse outcome to litigation. If interest based mediation fails then is the time, not before, to look at litigation options.

    As to your question, whether or not some reasonable notice should be given even in the absence of a current contractual commitment depends on the detail of the marketing service you carry out for them. If immediate withdrawal has a consequence that is significantly more damaging than it should be then avoid sudden withdrawal. Additionally as a mediator I would say that showing concern to not cause unnecessary additional damage is a good starting point to get the mediation off to the right start.

    I specialise in mediating disputes between shareholders/directors and would be happy to offer a proposal to all sides to undertake such a service. My set up work involves talking to all sides to ensure each understands the benefits to them. I was a member of the 6 person team that wrote an important Report for the Civil Justice Council on mediation - See https://www.judiciary.uk/wp-content/uploads/2018/12/CJC-ADR-Report-FINAL-Dec-2018.pdf
     
    Posted: May 19, 2019 at 12:24 PM By: The Resolver Member since: Mar 31, 2006
    #13
  14. Spenda

    Spenda UKBF Newcomer Free Member

    7 1
     
    Posted: May 19, 2019 at 9:00 PM By: Spenda Member since: May 14, 2019
    #14
  15. Clinton

    Clinton UKBF Big Shot Full Member

    3,963 1,367
    What about the email address in his signature? That not working? Nor the phone number he's got in his signature? :rolleyes:
     
    Posted: May 19, 2019 at 11:26 PM By: Clinton Member since: Jan 17, 2010
    #15
  16. Spenda

    Spenda UKBF Newcomer Free Member

    7 1

    I think forums like this are a fantastic idea and for the contributors that give you straight answers or guide you in the right direction thank you. For those that cant wait to jump on a post to be sarcastic or provide patronising answers perhaps you need to rethink why you contribute to forums. Just unnecessary.
     
    Posted: May 19, 2019 at 11:35 PM By: Spenda Member since: May 14, 2019
    #16
  17. Spenda

    Spenda UKBF Newcomer Free Member

    7 1
     
    Posted: May 19, 2019 at 11:38 PM By: Spenda Member since: May 14, 2019
    #17