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  1. #1

    Default Marketplace vs Agency - Valid Claim to Exclusivity with Clients

    My question involves independent contractors in the state of: California, USA

    Hi, I would like to know whether or not a company may label itself as a "marketplace" while simultaneously claiming exclusivity for clients. This company specifies a buyout penalty if a customer decides to work directly with a freelancer outside the platform. While this sounds reasonable for any agency, I do wonder if the company ought not refer itself as an "agency." (What is a "Limited Agency"?) Can someone please clarify this for me? Are the Terms below legitimate in the USA?

    Here is verbiage from their Terms document (edited to make it anonymous):

    THE SITE INCLUDES AN ONLINE MARKETPLACE THROUGH WHICH FREELANCERS MAY OFFER [XYZ] SERVICES AND CUSTOMERS MAY BOOK SUCH SERVICES. YOU ACKNOWLEDGE AND AGREE THAT: (1) [COMPANY] IS NOT A PARTY TO ANY AGREEMENTS ENTERED INTO BETWEEN FREELANCERS AND CUSTOMERS, (2) [COMPANY] ONLY PROVIDES MATCHING AND PAYMENT PROCESSING SERVICES, (3) CUSTOMERS CONTRACT FOR SERVICES DIRECTLY WITH FREELANCERS (4) [COMPANY] IS NOT A BROKER, AGENT (EXCEPT AS EXPRESSLY SET FORTH BELOW) OR INSURER...

    ...As stated above, [this company] makes available a marketplace with related technology for Customers and Freelancers to arrange for the matching of a Customer with a Freelancer and booking of Services. [The company] itself does not provide any freelance services. [The company's] responsibilities are limited to: (i) facilitating the availability of the Site, and (ii) serving as the limited agent of each Freelancer for the purpose of accepting payments from a Customer on behalf of the Freelancer.

    Non-Circumvention
    ...For 12 months from the time you identify or are identified by any party through the Site (the “Non-Circumvention Period”), you must use the Site as your exclusive method to request, make, and receive all payments for work directly or indirectly with that party or arising out of your relationship with that party. You may opt-out of this obligation with respect to each Customer-Freelancer relationship only if Customer or prospective Customer or Freelancer pays the Company for each such relationship by paying an “Opt-Out Fee” of $5,000 USD.

  2. #2
    Join Date
    Sep 2010
    Posts
    18,903

    Default Re: Marketplace vs Agency - Valid Claim to Exclusivity with Clients

    In most cases, you can call yourself what ever you please, and exclusivity is a contractual arrangement between you and the customers.

  3. #3
    Join Date
    Oct 2016
    Posts
    2,746

    Default Re: Marketplace vs Agency - Valid Claim to Exclusivity with Clients

    To expand on flyingron's accurate post. In this case "MARKETPLACE" really has no legal meaning.

  4. #4
    Join Date
    Mar 2013
    Posts
    16,744

    Default Re: Marketplace vs Agency - Valid Claim to Exclusivity with Clients

    Yes, the terms and conditions are legitimate in that they are not prohibited by law (anywhere that I know of).

    When you agree to a contract you are presumed to have read it and understood the consequences of its terms and conditions.

    If you don't understand them or you don't like them you negotiate more favorable terms or you walk.

  5. #5

    Default Re: Marketplace vs Agency - Valid Claim to Exclusivity with Clients

    Thank you flyingron, PayrolGuy and adjusterjack
    This is helpful - I appreciate it!

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