Breach of contract?

I am a self employed contractor, contracting to a single firm working in debt collection; the firm is regulated by the FCA.  Work is supplied directly from the firm under strict regulation, and as such the firm has to supply detailed work instructions per job on a per client basis.  2 of said client instructions are in breach of the FCA regulations (confirmed by FCA) and I have reported this accordingly.  The firm refuses to accept that there is anything wrong with their instruction.  Can I now treat this firm as being in breach of the agreed contract?



It is confirmed that the instructions themselves are in breach of the FCA regs, this confirms answer b.

There is an obligation to carry out the instruction, otherwise this is seen as “cherry picking”, the company reserves the right terminate the contract if they believe this is the case.  The company also states that all legislation, rules and guidelines must be complied with.

The firm has been clearly informed this work is non compliant, but I?ve just been told to get on with it.  The reason for this appears to be due to other/different and more lucrative work from the same client.

I have also had confirmation that reporting these rule breaches should be treated as a protected disclosure which would be in the public interest.

Thank you.

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Alasdair Taylor's Answer

It’s not 100% clear from the question whether: (a) the instructions themselves are in breach of the FCA regulations; or (b) the carrying out of the instructions would be in breach of the regulations. For the purposes of this answer, I have assumed the latter.

The first thing to consider is whether there is an express term of the contract between you and the company that covers this situation. If the company is in breach of such a term, then it may be in breach of contract, and you may have a remedy for breach of contract.

The next question is: do you have an obligation to carry out the instruction. If you do, then it seems likely that the doctrine of illegality will apply. Where the doctrine applies, then a contractual obligation to perform an illegal act is not enforceable. That is not the same thing, however, as saying that there is a breach of contract.

If you are trying to identify a breach in order to have a basis for terminating the contract (or indeed take any other risk-bearing action) you should take specific advice on this. The appropriate course of action will depend in large part upon what you want to achieve.

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