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GOT A LEGAL QUESTION? ASK MICHAEL@METROLAW.CO.NZ

PONSONBY PROFESSIONALS

Email Michael with your question and include PONSONBY NEWS in the subject line. Michael Hemphill, a partner of the firm will answer one topical question each month. I am a gardener, last year I travelled overseas for six months and while I was away I left my business in the hands of an associate. I asked him to look after my clients and we agreed when we discussed it that he would not take any clients for himself personally. I got back three months ago and my associate has now told me that a number of my old clients are switching to his services. Is there anything I can do?

Q:

Holiday snap of MICHAELHEMPHILL? (Editor - surely not!)

Not all contracts are written and signed documents. You can have oral contracts (that are agreed verbally) or they can be partly written and partly oral contracts. An oral contract is as binding on two people as a written contract. As a general principle you are bound to whatever you agree with someone as long as you can provide sufficient details of the content of the agreement and there is some consideration provided. The main issue with an oral contract is proving the terms of the contract.

A:

It seems likely that you should be able to establish that there was an agreement between you and your associate. Any written correspondence that you had with your associate may help provide evidence of the agreement. The fact that you provided him with contact details and other information for the clients and he then has carried out work for them should provide good evidence of an agreement. Obviously it would have been better if you had documented the terms of your agreement, particularly the term that he would not take any clients. This could have easily been done by bullet pointing these terms in an email. If there is not anything in writing about this term then you need to consider how you could prove this term; do you remember the occasion when you discussed this issue with him? Where were you when you had the conversation? What was his reaction? What other details do you remember of the occasion? It is worth noting down your recollection of any such discussions now as your memory will only fade over time. Your associate may also be in breach of a fiduciary duty. A fiduciary duty can arise when a relationship exists where someone is in a position of trust over the affairs of another. In these instances that trusted person has a duty to safeguard the interests of the other person. An example is the fiduciary duty that a lawyer owes to each and

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every client. It seems that you did put him in a position of trust and he has abused that position. A breach of fiduciary duty is recoverable through the court. You may be able to get an account of any profit that your associate received from breaching their fiduciary duty. The court may also prevent the associate from continuing to do work for those clients. You need to consider the cost to you of losing the clients as this will determine the best way of proceeding. You should discuss with him that he has breached your agreement and follow this up in writing. If the loss is under $15,000 then you could consider making your claim in the Disputes Tribunal which could be a cost effective way to get a remedy. Lawyers are not allowed to appear in the Disputes Tribunal. It would be a good idea to get in touch with a lawyer to help guide you through this process to ensure your rights and your business are protected. (MICHAEL HEMPHILL) PN Disclaimer - This article is for general information purposes only. If you have a legal problem you should seek advice from a lawyer. Metro Law does not accept any liability other than to its clients and then only when advice is sought on specific matters.

METROLAW, Level 2, 36 Williamson Avenue T: 09 929 0800 www.metrolaw.co.nz

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