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Stuart J
Stuart J, Solicitor
Category: UK Law
Satisfied Customers: 22624
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street practice
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In February 2013 a client signed a 3 year contract to

Customer Question

In February 2013 a client signed a 3 year contract to provide a cleaning service which was due for renewal in February 2016 if not terminated giving the required notice period. In simple it is a rolling agreement.
In July 2013 our company was making plans to join up with another sister company.
All clients were asked to sign a copy of their exisiting contract in the name of the new propsed company that was in the process of being formed.
The joining of the company did not take place and all parties were notified of this and the that trading terms and contracts would stay with the first company.
One client has served notice to terminate the replacement contract that was not implemented as the join did not take place.We have explained the position to this company who refuse to accept it and state their agreement is with the company that was to take over but never did and infact was not even formulated with companies house the day that they signed the new agreement. This client has through out paid the old exisiting company via the representation of their invoices as the old company did not join with the proposed new company as intended. How can we prevent the termination?
Submitted: 1 year ago.
Category: UK Law
Expert:  Ben Jones replied 1 year ago.

Hello, my name is***** am a qualified lawyer and it is my pleasure to assist you with your question today.

Expert:  Ben Jones replied 1 year ago.

Is it possible for me to see a copy of the agreement please?

Customer: replied 1 year ago.
here is the first agreement they signed which we never took out of action as the second company formation did not happen the second contract they signed was identical with all the same dates except in the name of the new proposed company that had not been registered at companys house as of that date
Customer: replied 1 year ago.
here is a letter from us and our accountants
Customer: replied 1 year ago.
here is the letter addressed to the company who were to take over but did not terminating
Customer: replied 1 year ago.
please see the last contact on this file please disregard the other two dated 1st April 2013 for the new company that did not proceed
Expert:  Ben Jones replied 1 year ago.

Thank you for sending me the attachments. I will review the relevant information and laws and will get back to you in a short while. There is no need to wait here as you will receive an email when I have responded. Also, please do not responded to this message as it will just push your questions to the back of the queue and you may experience unnecessary delays. Thank you.

Expert:  Stuart J replied 1 year ago.

Ben has opted out. I will try to deal with this for you.

I started to deal with this on the other thread for you.

I said that it was unlikely that your termination clause was going to be enforceable because of the very narrow window where you could give notice.

However, having now seen the Terms and Conditions of Contract, clause 1 is ambiguous. It says that you can give 12 weeks notice but you can only do that within seven days of the renewal date. And that the notice must be at least 12 weeks.

However, it also says that the contract is for 12 months.

The contract isn’t for 12 months, it’s actually for 15 months less a few days.

If this would to become an argument in court it’s likely that the judge would use what is called “the blue pencil test” which is a legal philosophy where anything which is ambiguous or misleading or unreasonable is not put right, it gets a blue line through it and is struck out.

I don’t think you would be able to rely on clause.

In the absence of an enforceable termination clause, the contract would run on month by month basis until such time as reasonable notice was given. There is no definition of reasonable and depending on the length of time the contract has existed and the nature of the contract, it is likely to be between 1 and 3 months.

If you want to try to prevent the termination, and they go ahead regardless and simply stop paying you and don’t let you in to do the work, you would have to take them to court. If the court did not find clause 1 un-enforceable and strike it out, you would be able to claim your loss of profit from the time they stop paying you they terminated the contract until the time when they would have been able to terminate under the terms of the agreement.

I would be very wary of taking this to court because if you do go to court and you lose, for the reasons I mentioned, the same thing would apply to all the other contracts which you have and that might not be particularly attractive for you if the word got round.

I know it’s probably not the answer you wanted but nonetheless, does it answer the question?

Can I answer any specific points arising from this?

Please don’t forget to use the rating service to rate my answer positively. I’m happy to clarify any points arising.

PS I would suggest that you urgently revisited clause 1. I am happy to look at this for you and I will submit a premium services proposal in that respect.