How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Ash Your Own Question
Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
75100385
Type Your Law Question Here...
Ash is online now

I am in a partnership agreement with a service provider of

Resolved Question:

I am in a partnership agreement with a service provider of a website builder. They wish to terminate the contract and I need some legal advice on whether or not they are still required to pay me sales commission following termination.
Submitted: 1 year ago.
Category: Law
Expert:  Ben Jones replied 1 year ago.
Hello do you mean you are a partner in a legal partnership?
Customer: replied 1 year ago.
Hi BenSince 2009 I have operated this website www.ezweb123.com. It is a website builder provided by a company called Sitemaker Software Ltd. I earn 30% commission on the sale of their website builder product and sale of domain names. I attach the agreement signed by their CEO in 2009. Recently, they advised that they wish to terminate the agreement as they no longer feel it profitable to run their partner programme.Looking at the termination section of the attached and particularly clause 4.6 it (in my view) it states that they must continue to pay me for up to 12 months on my member subscriptions i.e. commission. However, their own legal team have advised that this is not the case. Sitemaker has stated the following:"As you rightly point out, clause 4.6 states partner will continue to receive payments for a period "the lesser of 12 months or the duration of their subscription". We have Monthly and Annual subscriptions, this is how this clause would apply to both cases:Monthly
The subscription will expire within a month of the termination date and will not be renewed. In this instance, the duration of the subscription is the lesser option. No further payments will be taken from the customer and nothing would be owed to the partner.Annual
We collect the full fee for an annual subscription at the point of sale, and pay the full share at the point of collection. No further payments will be due over the 12 month period and therefore nothing will be collected from the customer, and nothing would be owed to the partner.I'm afraid your proposal where we continue to renew subscriptions for a period of 12 months isn't what this clause provides for, and isn't something I can offer. All the clause means is that we must honour the full subscription term of anything we've sold. What this means is that if you choose not to allow customer to transfer to Moonfruit directly, at the point their subscription ends after the termination date, we will not renew it.If you do choose to allow the customers to move to Moonfruit directly, they would become Moonfruit customers and no further payments would be due to you. I appreciate this doesn't seem like a worthwhile deal, but most Partners so far have chosen this option, usually for these reasons:There is no need to maintain your website – If you've sold an annual subscription to a customer, you will need to keep your website running for the duration of that subscription in order for the customer to continue getting the service they were sold as they access through your site. If you transfer to us the site can be shut down right away as they'll access through Moonfruit
Simplicity – If you don't want to go through the process of finding a new provider and transferring the sites
No need for customer communication or management
Being blunt, I know it seems unfair that we're proposing we take the sites with no further fees paid to you. However, the reality is that the data is so limited that it's really not possible to value the customers in any way I could possibly get through legal, and the numbers are too low to justify the task of acquiring them. Also, there is a reasonable amount of effort necessary to transfer the sites across to Moonfruit, and this cost pretty much wipes out any profit margin we might get from these sites as it is.The reason we are offering to transfer them is that we think it's fairer to the customer if they can continue their service uninterrupted, and it's as fair as possible to the partner that they don't have to deal with winding down the customer base.Please let me know what you decide you'd like to do. Again, for the sake of clarity, the options are:
Transfer to a new provider (this effectively means you'll have access for a period of time after the termination date)
Wind down – in accordance with the terms of the agreement, we'd honour existing subscriptions but not renew any subscriptions from the termination date onwards
Transfer to Moonfruit – no further payments will be paid to you and the customers will become Moonfruit customers directly. We will handle the transfer process
Thanks again, and apologies for the poor set of options. I genuinely did try extremely hard to find a way to make this program workable."Please note that 'Moonfruit.com' is a website owned by Sitemaker; where they are offering to transfer our member websites to.The question here is whether they are right in what they are saying; or just trying to get out of paying us commission? Hopefully you can help clarify. Thanks.RegardsPeter
Expert:  Ben Jones replied 1 year ago.
Ok thanks let me look at it in more detail I will have to reply later today thanks
Customer: replied 1 year ago.
Okay - thanks Ben.RegardsPeter
Customer: replied 1 year ago.
Morning BenJust wondered whether was any news? I need to get a handle on whether this is worth pursuing or not. Thanks.RegardsPeter
Customer: replied 1 year ago.
Hi BenI have been asked to rate your response; but this hasn't been received yet? Please advise. Thanks.RegardsPeter
Expert:  Ben Jones replied 1 year ago.
Hi Peter, sorry I tried to reply last night but my internet was down. I actuallylooked into your query in more detail but unfortunately it is not something I can assist with. I will therefore ‘opt out’ and a colleague better placed to deal with the nature of your query should hopefully pick this up soon. Please do not reply in the meantime as that will just assign the question back to me and you will experience a delay. Thank you
Expert:  Ash replied 1 year ago.
Hello my name is ***** ***** I will help you.Where is the company based please, ie which country?
Customer: replied 1 year ago.
Hi AlexEngland. Thanks.RegardsPeter
Expert:  Ash replied 1 year ago.
Can you upload the agreement again as I cant get it to open?
Customer: replied 1 year ago.
Here it is. I am particularly interested in clause 4.6 under termination. Thanks.
Expert:  Ash replied 1 year ago.
Sadly that upload didnt work
Customer: replied 1 year ago.
Oh, can I email this to you?
Expert:  Ash replied 1 year ago.
Yes:***@******.*** - but it takes admin a few days to forward it to me.
Customer: replied 1 year ago.
Don't you have another email address that I can send it to now?
Expert:  Ash replied 1 year ago.
I cant give you my personal one sorry - its only at the one I gave you.Or you can paste clauses on termination generally.
Customer: replied 1 year ago.
Okay, I've had to convert the PDF to a word doc to copy and paste; so is not perfect; but here is clause 4.6:"In event of termination, as set out in clause 7.4, 'Partner' will continue to receive payments for 'Partner' Subscribers for a period of the lesser of 12 months or the duration of their subscription".Here is section 7 of the agreement: "Duration and Termination":Duration and Termination7.1 Unless terminated pursuant to the other provisions of this Clause 7, this Agreement shall commence on the date hereof and shall continue in force for an initial period of 18 months after the Launch Date and thereafter may be terminated by either Party for its convenience (but without cost or penalty) upon the giving of not less than 30 days prior written notice to the other.7.2 Either party may terminate this Agreement forthwith in the event that (i) the other party commits a material breach of its terms, and either that breach is incapable of remedy or the other party shall have failed to remedy that breach within several days of a written request to do so, or (ii) the other party becomes insolvent, is unable to pay its debts within the meaning of Section 123 of the Insolvency Act 1986, or enters into administration or receivership, or (iii) the other party ceases to function as a going concern or to conduct operations in the normal course of business carried on at the date of this agreement, or (iv) the other party fails to make payment in accordance with this Agreement.7.3 . Any termination of this Agreement (however occasioned) shall not affect any accrued rights or liabilities of either party nor shall it affect the coming into force or the continuance in force of any provision hereof which is expressly or by implication intended to come into or continue in force on or after such termination. ·7.4 In the event of the termination of this Agreement, SSL shall continue to host such sites built using the customised link pages as have at the date of termination of this Agreement been established or which are in the process of being established. The users of sites built using the customised link pages shall for all purpose remain customers of SSL.7.5 In the event of termination of this Agreement, 'Partner' shall continue to make 'Partner' Brand specific URL available to 'Partner users' who have built sites using this domain in the form www.usersitename.partnerurl.com , for a period not less than 6 months from the date of termination of this Agreement. In addition, in event of 'Partner' selling the brand specific URL, 'partner' shall provide SSL with first refusal for its sale.7.6 In the event of the termination of this Agreement, use by each party of aII brand features, excluding those included in clause 7.5, and all intellectual property rights whatsoever of the other shall immediately cease.Please note that we (ezweb123.com) are the partner. Partner subscribers are our members who are paying for the service hosted by Sitemaker Software Ltd (SSL) - the software providers of the website builder embedded into our site at ezweb123.com; referred to as link pages.Please refer to the previously posted response from SSL in regard to their interpretation of clause 4.6. I believe that this clause actually says that we (ezweb123.com) are entitled to receive commission payments from any partner subscribers for up to a period of 12 months post termination (unless the subscription expires before this time). This would be once our site has closed and all of our members sites have been transferred to moonfruit.com (SSL's own website building brand); which is being suggested by SSL (see their email posted before).1. Do you agree with SSL's interpretation of clause 4.6?
2. My interpretation?
3. Or is it unclear; and too difficult, or costly to prove either way legally? Note that the loss of income to me could be between £6K to £10K. Unfortunately, we have no data currently to confirm the number of current paying subscribers (I have requested this and they have advised that they will provide); but based on an average monthly revenue received; this is approximately what the loss would equate to.Thanks.Peter
Expert:  Ash replied 1 year ago.
I consider that you are entitled to payments for 12 months. I dont see why they wont renew a monthly subscription, in fact if I were you I would get friends to sign up through you to see if they are charged, ie seed the product.I think that they will continue to bill for a year and you are entitled to your share of those proceeds. You need to work out what they would be.You need to write and set out your losses and request a refund of those fees within 14 days or say you will go to Court within 14 days. You should make sure you send this signed delivery and keep a copy.If they do not refund you then you can issue proceedings in the County Court. You can either do this online at: www.moneyclaim.gov.uk or by completing form N1 http://hmctsformfinder.justice.gov.uk/courtfinder/forms/n001-eng.pdf and take it to your local County Court.The Court will then issue a claim which a copy will be sent to the Defendant who will have a limited time to defend it, if not you can enter Judgment and enforce.If the claim is for £10,000 or less it will be a small claim so you will not need legal representation. Over this value you would need representation for trial.Can I clarify anything for you about this today please?Alex
Customer: replied 1 year ago.
Hi, thanks.Please can you explain "I don't see why they wont renew a monthly subscription, in fact if I were you I would get friends to sign up through you to see if they are charged, i.e. seed the product."You therefore accept that my interpretation of clause 4.6 is correct? Please confirm.So if you were me; what next steps would you take; taking into account that they haven't yet issued the 30 day notification? What should be my exact response to their email (as posted above on the string). I would be grateful for some exact text; if you can provide that? Thanks.RegardsPeter
Expert:  Ash replied 1 year ago.
4.6 - YESI am saying you should get someone to sign up monthly through your website that you know so if you terminate you can see whether they still charge the person you got to sign up.That way you know whether they are billing monthly people who they have said they wont.Does that clarify?Alex
Customer: replied 1 year ago.
Sorry, furthermore I am seeking to try and end this amicably; as my relationship with SSL is still positive. I am looking to avoid going to court and as such word a response in a way that clearly states what your legal understanding of clause 4.6 is so this can be relayed to their legal team. Can you provide this?
Expert:  Ash replied 1 year ago.
Sadly I cant be instructed by you so cant provide a response.However you should say that you disagree with their interpretation and that it is quite clear - you are entitled to continuing payments for 12 months.You can also suggest mediation to resolve the dispute.Does that clarify?Alex
Customer: replied 1 year ago.
SSL have stated that they will still take monthly payments from my members who have transferred over to moonfruit.com (SSL brand); but will not continue to pay commission to me. If you look at their email they say "Transfer to Moonfruit – no further payments will be paid to you and the customers will become Moonfruit customers directly. We will handle the transfer process."
Expert:  Ash replied 1 year ago.
You are still entitled to commission for 12 months, that is what the agreement saysAlex
Customer: replied 1 year ago.
Okay thanks.
Expert:  Ash replied 1 year ago.
If I could invite you to rate my answer before you go today please, otherwise the site doesnt credit me for the time spent with you. Good luck and enjoy whats left of Sunday! Alex
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience: Solicitor with 5+ years experience
Ash and other Law Specialists are ready to help you