Retainer agreement confusion

[mattedwardsuk]

I work for a startup and we engaged a creative agency on a retainer. The work was initially very good but then seemed to really drop off. As time went on we used them less and less and I found myself in a situation whereby we had a lot of hours carried over. Because it was a high cost, I decided to cancel the retainer, giving them 30 days notice, as per our agreement.

Today the agency have come back and said you’ve lost those accumulated hours - which added up to some 6 weeks worth. No where in the contract does it mention terminating the agreement would cause me to loose this accumulated time, and I’ve got a final months bill to pay. What would people recommend I do?

 

[Paul Carmen]

If it isn't covered in the agreement or any statement of work, then email them and open a dialogue, as most contracts first port of call is for business stakeholders to try resolve any issues and disagreements amicably.

 

[Newchodge]

I work for a startup and we engaged a creative agency on a retainer. The work was initially very good but then seemed to really drop off. As time went on we used them less and less and I found myself in a situation whereby we had a lot of hours carried over. Because it was a high cost, I decided to cancel the retainer, giving them 30 days notice, as per our agreement.

Today the agency have come back and said you’ve lost those accumulated hours - which added up to some 6 weeks worth. No where in the contract does it mention terminating the agreement would cause me to loose this accumulated time, and I’ve got a final months bill to pay. What would people recommend I do?

Cancel your direct debit.

 

[Solvelaw]

You need to examine the terms, many types of agreement like this work like a gym membership "use it or lose it" I appreciate you have got unused hours, but if the agreement is silent, its very likely difficult to say that you will still have benefit beyond termination of those terms or arrangement. Let's look at this way, if you were able to use the time beyond termination, then what terms would that service be on? Contract have time line where terms are engaged and discharged. written terms need to be certain and if uncertain will not be enforceable.

 

[mattedwardsuk]

You need to examine the terms, many types of agreement like this work like a gym membership "use it or lose it" I appreciate you have got unused hours, but if the agreement is silent, its very likely difficult to say that you will still have benefit beyond termination of those terms or arrangement. Let's look at this way, if you were able to use the time beyond termination, then what terms would that service be on? Contract have time line where terms are engaged and discharged. written terms need to be certain and if uncertain will not be enforceable.

Thanks for your comments, a very frank and honest conversation was had and ultimately we came to a mutually workable solution. I think the simple truth is that you need to try and talk it out and be reasonable.

 

[thetiger2015]

It comes down to the contract of course, but agencies wouldn't expect clients to 'bank' hours. They'd expect almost all of the hours to be used up each calendar month, hence the 30 day notice period, to tie up any lose ends and complete any additional work that was hanging over.

Your account manager maybe should of made that clearer or been on the phone to you regularly, to ensure you used all of the hours in your agreement each month. Perhaps they weren't aware of this themselves.

This is something I've come across a lot, agencies start of really well, everything goes great but after about 6 months or so, the relationship falls apart. Most businesses swap agencies every year anyway, it's just a thing. They like to re-start everything, have fresh meetings, new ideas, new people. The last few weeks are awkward because the client and agency know the contract isn't going to be renewed.

Once the relationship is sour, it's best to just cut the contract and stop talking to eachother IMO