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January 2003 issue

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Using contracts

Many agent-school business partnerships are still based on mutual trust, but will a trend towards greater regulation of the industry bring with it the need for working relationships to be set out in a contract? Gillian Evans investigates.

It is surprising perhaps that in a maturing industry such as the international education business, the relationship between agents and schools is not always sealed in a contract. Kazumi Yokozeki of Mainichi Communications agency in Japan is typical when she says, 'If [our partner] prefers to sign a contract, we do it.'

There are, however, those in the industry who always sign a contract with their partners, and the theoretical advantages of contracts are widely acknowledged. From the school's point of view, contracts enable them to set out clearly how they expect an agency to represent them. 'We always sign contracts with agents so that the agent knows what we expect of them and vice versa,' says Di Free at Adventure Education in New Zealand. 'It ensures that all major issues have been read and understood.' Dorothee Robrecht at GLS Sprachenzentrum in Germany adds, '[Contracts] are effective in the sense that they are kind of a declaration of intent to work together.'

For agents, contracts can provide details about, for example, commission fees and cancellation policy. And the more detail the documents contain the better, says Eric Blanchot of Aubert Ermisse Tours in France, who largely uses contracts as a reference point. 'We have contracts fixing quality conditions [at schools], unless an agent manual is clear enough to be used as a reference,' he says.

Gary Imrie, of Best Education Studies in Taiwan, adds, '[The] advantages [of contracts] are that they define the expectations on either side... [and] you can use them to present to other [institutions] you wish to [work with] as evidence of your status.'

Verification of agencies as quality operations is important and formalising relations through a contract can provide added kudos for agents. Masakazu Sakata, Director of Network Communications in Japan, which always enters into contractual agreements with schools, says, 'Schools send [me] certificates I can put on the wall. All my clients look at these certificates and then they trust my company.' Sakata also adds that some contracts stipulate the turn-around time for agency queries, which can result in a more efficient service for the agent. 'It is quite convenient when I have a contract with schools. When I have some questions [for] the school which I send by email or fax, they answer within 24 hours.'

Despite the advantages of contracts, some schools and agents remain sceptical of their practical use. 'All contracts, formal and informal, depend on the goodwill of both parties,' states Sue Coulthard at the English language schools' association, Arels. 'The main problems that our members have are that some agents do not adhere to some of the terms in the contract - such as cancellation fees, payment terms and pre-arrival language testing of students.' Imrie's main gripes are the late payment of commission and 'lack of people in large universities looking after agents' accounts', which can occur even if the agency has signed a contract with the school. As Imrie says, '[Contracts] are often so general that there is little practical meaning.'

Many agents, such as Annamaria Tondi of I Viaggi del Toghiro in Italy, rely on their instincts rather than contracts. 'I sign contracts with very few schools,' says Tondi. 'I generally work with schools I trust and I don't feel [it is] necessary to sign a contract.'

Industry sources are divided over whether the use of contracts will become more widespread in the future, although some believe it will as the market becomes more regulated. This has, to some extent, been the case in New Zealand. Last year, the New Zealand government issued a Code of Practice for the Pastoral Care of International Students, with which schools and the schools' agents must comply. Non-compliance with the code can result in a school being prevented from accepting international students.

South Canterbury School of English Language has signed the code of practice, and as a result, says Bruce Aston at the school, they are changing their agent contract to bring it in line with the new guidelines. He adds, 'We used to have a situation where some of our agents insisted on contracts and others were not interested. We are now gradually introducing the contract to all agencies and making [our procedures] standardised.'


Enforceability of contracts

One of the main problems with contracts lies in the inability for many agents and schools to make them legally enforceable. 'Agency contracts are very difficult to enforce within the European Union (EU) and impossible to enforce outside the EU,' admits Sue Coulthard of Arels in the UK. Eric Blanchot of Aubert Ermisse Tours in France reports that they once tried to sue an overseas school but gave up as it was 'too difficult to find international legal experts and too expensive'.

Schools can encounter similar problems, as Bruce Nickson of Modus Language Institute in Canada highlights. 'Contract enforceability is the name of the game. The fact of the matter is that schools rarely have the financial resources to ascertain whether a home country contract is enforceable overseas,' he says. Ultimately, he says, 'Contracts for us are simply codification of mutual responsibilities.'

Cyril Henderson, Marketing Manager of Pacific International Hotel Management School in New Zealand, which generally issues letters of appointment and certificates to their agent representatives, brands contracts a 'waste of time and largely unenforceable'. He continues, 'If either party is unhappy and the matter cannot be resolved amicably there is simply no point in continuing with the relationship.' Dorothee Robrecht of GLS Sprachenzentrum in Germany agrees, saying that even when they do sign contracts with agents, 'consensus in case of disagreement is always reached by simply talking to each other'.

While contracts undoubtedly have their place in enabling agents and schools to have a clear record of what is expected from each party, most sources say the emphasis must always be on trust and good communication. 'The single most important factor is the relationship between us and the school,' confirms Gary Imrie of Best Education Studies in Taiwan. 'With good relationships, then any potential problems can be overcome.'

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