What does combining £200 million, one disgruntled worker and an overzealous new financial backer get you? Simply, a terminated contract. So how does this make you and Neymar similar?
I am sure there are many people out there that would love for a huge financial backer to come in and get them out of a commercial contract with onerous terms, much like with Neymar’s situation at Barcelona, where the release clause stood at an eyewatering £200 million. One of the most relatable questions we get here at Hybrid is “how can I get out of my supplier contract?”
Unfortunately, for the vast majority of us (Neymar excluded), we don’t have a financial backer to come in and pay a release clause allowing us to walk away from these troublesome contracts. We have seen many clients experience issues with being tied in for long periods of time, automatic extension periods and ridiculously high early termination fees.
So, what can you do?
Firstly, you need to ensure you are aware of the termination clauses in any agreement you are signing. If you’re unsure about any of your agreements always get professional guidance on this point. Don’t just sign and hope for the best!
Secondly, you need to ensure that you are keeping track of deadlines for notices, being one day late can mean you are tied into another year of service for example. This is not ideal if you have plans to move on to a more reliable supplier with better rates. We have seen this happen to clients in the past where the agreement has been enforced.
Finally, make sure any notice you provide to end the contract is in the form prescribed within the agreement. If you provide a notice by email but the agreement says it must be posted/delivered by hand, you’re going to run into trouble.
Overall, you need to make sure you’re aware of the termination terms before you sign the agreement allowing you to make a fully informed decision.
Alternatively, you can ask a new supplier to pay the early termination fee and walk away into the sunset hoping the grass is greener on the other side of the pitch.
Written by Jonathan Craddock (NB – Should you wish to pay my release clause, of a bargain £10 million, please direct all enquiries to Ryan Lisk. Alternatively, why not get in contact to discuss our Legal Plus service to get my guidance at a fraction of the £10 million.)