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Fair dealing with agents
This page was created when we updated the "Protection of agents' business" non-solicitation clause of our terms to make special provision for the agents who help us to negotiate much of our offshore work.
We strongly support non-solicitation agreements because they promote fairness by protecting the interests of agents whose work puts business our way, and merits compensation through commission fees. After an agent has introduced us to a client, it is our firm principle that we will not offer further services to the client or its direct associates and subsidiaries in a way that unfairly bypasses that agent's legitimate right to commission on the business. We would act this way even in the absence of a non-solicitation clause in our contract. If clients approach us directly, we refer them to the appropriate agent, and we usually do this even if the time-limitation of the non-solicitation clause has run out.
Inappropriate non-solicitation and non-compete clauses
Occasionally, boilerplate non-solicitation clauses are mistakenly lifted from contracts of employment, where they are typically stricter or overlap into non-competition – for example a clause may have the effect of prohibiting work for any other company in the same line of business. This is clearly inappropriate in a contract for the provision of services, and Sealand does not enter into such agreements, nor may our employees do so on their own account. It should be understood that we routinely do business within our specialisation with clients who compete with each other.
Why do our published terms include a non-solicitation clause?
To ensure fairness in cases where we conclude a contract without such a clause, or where we have to strike out an over-broad clause. It is a reassurance that we will not take unfair advantage of a missing non-solicitation clause. Our partners are assured that, by default, a non-solicitation agreement exists between us even if it is omitted from a specific contract.
If we have to decline an over-restrictive or otherwise inappropriate non-solicitation clause then, either explicitly or by default, we substitute the terms advertised here. Our non-solicitation clause, under "Protection of agents' business", is as follows:
In a specialist field with a limited number of potential clients and a limited number of agencies, over-broad non-solicitation agreements can unintentionally become restrictive practices.
An example is our business in the industry of offshore operations, where a limited number of well-known clients (which frequently merge with each other) solicit for services through a limited number of specialist agencies in the UK. As is prudent, we seek this business through multiple agencies. For confidentiality, agencies can be reluctant to disclose who their clients are. As a result, we frequently enter initial discussions before the identity of the potential client is disclosed.
Our terms are framed to reflect this. We take reasonable steps to ensure that agents who have introduced us to clients get the exclusive opportunity to obtain further contracts for us with the same clients. For example we will not solicit clients directly without involving the original agent, and we never solicit rival agents for the same client.
But when we receive an approach on behalf of an undisclosed client, it would not be fair to any party if we negotiate to the point where we discover who the client is, only to say, "Thank you for your time; we must now negotiate this business through another agent." The fair and equitable principle is, "First come first served.", so we avoid non-solicitation clauses that break this practice. But we will not play agents or clients off against each other or accept a "better offer" while negotiating in good faith with another party. Please do not ask us to do this; you already have your answer.
The bottom line ...
... is that it's not about rules, but about decency and fairness, and we strive at all times to exhibit both of these to all of our clients and agents. Remember the Golden Rule.