Nobody likes feeling as if they are tied down to a contract that automatically renews without their consent, and with the labyrinthine nature of many energy contracts, it can sometimes be easy to miss that a gas or electricity contract contains an autorenewal clause.
A business energy consultant can help navigate this specific and often-frustrating part of contract law, help you work out when your renewal window is and assist in navigating the sometimes-onerous switching process.
However, if you are concerned about an autorenewal, you may still be able to get out of the contract, although how easy this will be might depend on the specific terms of the contract and how late your notice period is, as well as the potential effects of relatively new legislation.
Are You Within The Renewal Window?
The process of cancelling an energy contract for a business customer is different to that of a domestic or residential customer because of the lack of a legal obligation to provide a cooldown period and slightly fewer consumer protections in general.
The process for a business energy contract is that there is a renewal window of between 28 and 90 days (depending on the supplier), during which time you will receive a letter of renewal stating that the contract will end shortly.
Within this period, you must provide written notice of your intention to either renew or leave your supplier. If neither is done, then the contract rolls over onto a set of contingency terms known by Ofgem as a deemed contract.
Trying to switch within the designated window is easily the best way to save money on energy bills.
What Can You Do Outside Of The Renewal Window?
Unlike with domestic contracts, which are subject to a range of protections, including cooling-off periods, business contracts typically have more freedom to negotiate and arrange terms as the customer and supplier see fit.
This can be positive in some ways, but a side effect of this is that a lot of consumer protections introduced in more recent legislation do not necessarily apply to businesses.
Despite this, there are a few options available that might allow you to escape an autorenewed contract, although since most of them pertain to contract law, getting in touch with energy contract experts and legal professionals is essential.
Argue Against The Unfair Contract Terms Act
The main law that covers business contracts is still the Unfair Contract Terms Act 1977, with domestic customers typically covered under more recent and restrictive legislation.
The legal precedent surrounding the UCTA is typically based on limiting some of the terms businesses can agree to when they enter into a contract, not allowing some kinds of contract terms to be included if they are deemed to be unreasonable.
It typically applies to the misrepresentation of goods, performance requirements stipulated or implied by a contract or the restriction of certain remedies in contracts.
However, it does not typically allow for standard terms to be challenged, of which a deemed contract might be considered, although, as the precedent has not been challenged either way, some legal commentators have claimed that it might be possible to cite the clause if it was said to lead to a substantially different service.
Claim Contra Proferentem
Known as the “interpretation against the draftsman”, contra proferentem is a claim that the clause was ambiguous and should be, per legal precedent, argued against the offerer of the contract.
This will only work if the contract’s auto-renewal clause was worded ambiguously, but there are cases where a supplier’s contract could have been vague in terms of how the autorenewal is applied.
Claim Misrepresentation
If you remember the discussion with a salesperson or have copies of any correspondence with the gas supplier and feel like they have misrepresented any part of their service, it could be considered grounds to exit the contract, although this can be difficult to prove outside of a court.
Claim Unacceptable Performance
If there have been frequent issues with your service that have not been remedied to a standard required in the contract, you may be able to stop the contract by claiming performance grounds, although this is often open to interpretation in court.
Claim Incorporation Of Terms
If there is a term in the contract that is particularly odd or considered to be onerous but is not immediately clear, it might be considered a violation of the incorporation of terms under the “red hand rule”
This states that the more unreasonable a contract clause, the more the supplier needs to make it clear, although it would be difficult to claim an autorenewal qualifies unless it has a particularly unfair or lengthy notice period.
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