Member Since: 12th Nov 2015
9th Feb 2016
Call hsi bluff - and complain to the AAT
Under the Unfair Contracts Act in respect of a business contract it is for the courts to decide what is reasonable. Does the contract contain a penalty clause? If not the accountant needs to show that has suffered loss if the client simply walks away from the contract..If he can use his staff on other things his loss s probably limited to the profit he would have made on the job. Whether he will want to go to court and disclose that, so that it can be publicised locally, is questionable. Furthermore, he may have suffered no loss if he can replace the client.
I think this is an ethical issue more than a legal one. A client is entitled to choose who should represent him. You cannot insist on keeping a client who has lost confidence in you. I think that the questioner should encourage the client to complain to the AAT. I also think that, even if the client breaches the contract, the accountant has no right to withhold his books and records and thus prevent him from meeting his statutory obligations for the current year, and no right to ignore the normal professional niceities. I would be very surprised if the AAT is not prepared to sort this out.