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I'm representing a Limited company from the United Kingdom and my team has been working with a client for a few months now under an agreement we provided.

Now they incorporated in the state of California they are demanding us to sign a template contract from Clerky.com. This new agreement talks about non-compete and reporting directly to the CEO which has no relation as an agency at all.

They are holding off from paying the bills and it puts unnecessary stress on our relationship. As such I'm trying to understand the reasoning behind this requirement. Asking for clarification from the client has led nowhere except that all 10+ contractors they worked with had no issue with it.

According to online sources I assume they feel required to get a new contract signed due to AB5, I never got confirmation about this.

Does an agency from the UK needs to sign an agreement that exempts a company incorporated in the state of California from the AB5 legislation? Or could there be other reasons for this new contract to be required?

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  • How does the contract differ from the contract (written or unwritten) that you had with them before?
    – sharur
    May 13 at 10:00
  • The agreement we have stipulates the parties, the services provided, IP, termination, confidentiality, liability. The contract they provide adds a non-compete, direct reporting to the CEO of the client, company benefits and many other terms applicable to an individual contractor They're even moving the Governing Law to their own country. Klergy.com lists these contracts under hiring. The client thinks they are hiring a contractor, not an agency for some reason and I can't clarify the distinction in this regard.
    – Luceos
    May 13 at 10:51
  • Oh and the original agreement (written) we had with them was directed at the CEO personally, not the recently incorporated entity.
    – Luceos
    2 days ago

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