fallen foul of unfair contract

aceframer

Just a warning as I've fallen foul of a handepay / Merchant Rentals contract !!

Anyway, I signed a 36 month contract - no probs there as I knew that was the term although a bit worried as a new business and 3 years was a long time - this expired in January this year. I Duly sent in written request to cancel contract only to receive a very curt letter back advising me that the contract had extended for a further 2 years because I didn't give notice 12 months before the expiry of the 36 months that I wanted to cancel!!! Firstly, I didn't know at 24 months that I'd not want it to continue so I wouldn't have given notice at that point. whilst the salesman was very specific about the 36 month term, there was absolutely no mention of this ridiculous "on the dot, 12 months in advance" notice period, nor the 2 year enforced extension to the contract.

The upshot is they want £600 from me to return the damn thing to them - money I don't have as business is poor. now - they won't budge on the contract and trading standard tell me that whilst they agree the contract is unfair and unreasonable, as a business-to-business contract I do not have ANY protection in law against this kind of thing!

Anyone, any ideas or advice (apart from bite the bullet and never trust a salesman), and why is there no protection for business contracts, no wonder so many small businesses go under !!

Wywth

aceframer wrote: »

Just a warning as I've fallen foul of a handepay / Merchant Rentals contract !!

Anyway, I signed a 36 month contract - no probs there as I knew that was the term although a bit worried as a new business and 3 years was a long time - this expired in January this year. I Duly sent in written request to cancel contract only to receive a very curt letter back advising me that the contract had extended for a further 2 years because I didn't give notice 12 months before the expiry of the 36 months that I wanted to cancel!!! Firstly, I didn't know at 24 months that I'd not want it to continue so I wouldn't have given notice at that point. whilst the salesman was very specific about the 36 month term, there was absolutely no mention of this ridiculous "on the dot, 12 months in advance" notice period, nor the 2 year enforced extension to the contract.

The upshot is they want £600 from me to return the damn thing to them - money I don't have as business is poor. now - they won't budge on the contract and trading standard tell me that whilst they agree the contract is unfair and unreasonable, as a business-to-business contract I do not have ANY protection in law against this kind of thing!

Anyone, any ideas or advice (apart from bite the bullet and never trust a salesman), and why is there no protection for business contracts, no wonder so many small businesses go under !!

In business, always read the contract carefully. If, after reading the contract, you are unsure of anything, seek legal advice before agreeing to the contract

Savvy_Sue

Wywth wrote: »

In business, always read the contract carefully. If, after reading the contract, you are unsure of anything, seek legal advice before agreeing to the contract

To be fair to the OP, I had cause to read our photocopier lease contract the other day, and I cannot find an end date in it AT ALL!

ace, have you now established how you would give notice for the end of this two year period?

Could you by any means keep paying?

Is the £600 to return now a reduction, or does it not save you anything over that 2 year period?

Sometimes you can haggle these things: if the choice for the supplier is between 'nothing' (because you're going to go bust) and 'something', they may accept 'something'. And if the choice for the supplier is between 'something' and you giving them as much bad publicity as you can, they might be wise to accept 'something'.

Also are you a sole trader, ltd co or some other trading style? Are you giving up this business, or hoping to limp on? That might also make a difference to the advice offered.

amcg100

Although you don't have the same rights as consumers you still have legal protection. If a court deems the terms of a contract to be unfair then the contract becomes unenforceable, and since you already have the agreement of a public body that this is the case your chances seem good. These are just bullies, and like most bullies the start crying when anyone stands up to them- get into them!

dacouch

If you have business Insurance you may have free legal advice attached to it, some even include legal expense cover / assistance with contract disputes.

Have a look at your business insurance

Buzby

This is quite common on business contracts - indeed, mobile phone contracts were originally self-renewing and the customer had to advise of their intention to exit within 7 days of the anniversary of the contract signing. This gave you a 14 day window ONLY to modify your contract.

They are fully legal, and the onus remains with the business to know what they are getting into. This doesn't mean you cannot cancel, just that it is more expensive to do so.

bris

amcg100 wrote: »

Although you don't have the same rights as consumers you still have legal protection. If a court deems the terms of a contract to be unfair then the contract becomes unenforceable, and since you already have the agreement of a public body that this is the case your chances seem good. These are just bullies, and like most bullies the start crying when anyone stands up to them- get into them!

No, this is not the case with B2B, only consumers have protection from unfair contracts. It would take a very serious breach of contract for a court to rule against this one, contracts like this are normal in business terms.

Unlike consumers businesses are supposed to be competent and have access to legal help when it comes to B2B contracts, they don't have any where near the same level of protection as consumers do.

amcg100

bris wrote: »

No, this is not the case with B2B, only consumers have protection from unfair contracts. It would take a very serious breach of contract for a court to rule against this one, contracts like this are normal in business terms.

Unlike consumers businesses are supposed to be competent and have access to legal help when it comes to B2B contracts, they don't have any where near the same level of protection as consumers do.

I am afraid I disagree, although it is a long time since I have studied contract, I am sure there are remidies. As a business person, if I sign a contract which requires me to pay a million quid for a goldfish once a year, then this would fail for two reasons. 1 is consideration, and the other is the ' intent of the parties ' - ' this approach is divergent to the law adopting a subjective approach, whereby, the courts would be guided by what a person really had in mind'
If there were truly no remedies under contract there are certainly remedies under Tort, since it could be construed that the inclusion of unfair terms was malice, and since a standard contract was used, possibly negligence, if the issuer of the standard contract failed to advise of these terms.
For a sum of £600 it is hardly worth a lot of legal hassle, but handepay merchants might take a similar view when you tell them to go stuff their contract.

aceframer

I'm a sole trader and they are refusing to budge. but never mind as a customer i now have two years to keep posting this everywhere i can. i bitter and twisted and will cost them more than i am worth, if i put one person off it will cost them more - how many will see this post in two years ? everytime i see there name on my bank statement it will remind me to repost it everywhere and up date it, costing them more and more.

happy customers tell 3 people on average, upset ones tell the world its mum, the neighbours and thier dog

im om a mission !!!

zzzLazyDaisy

amcg100 wrote: »

I am afraid I disagree, although it is a long time since I have studied contract, I am sure there are remidies. As a business person, if I sign a contract which requires me to pay a million quid for a goldfish once a year, then this would fail for two reasons. 1 is consideration, and the other is the ' intent of the parties ' - ' this approach is divergent to the law adopting a subjective approach, whereby, the courts would be guided by what a person really had in mind'
If there were truly no remedies under contract there are certainly remedies under Tort, since it could be construed that the inclusion of unfair terms was malice, and since a standard contract was used, possibly negligence, if the issuer of the standard contract failed to advise of these terms.
For a sum of £600 it is hardly worth a lot of legal hassle, but handepay merchants might take a similar view when you tell them to go stuff their contract.

I don't agree. In contract law businesses entering into contracts are viewed as having equal bargaining power and are assumed to have read the contract and taken advice (or freely chosen not to take advice) before entering into the contract. Tort relates to duty of care and the law of negligence, which does not apply here. The simple fact is that IF the contract states what the provider claims, then it will be enforceable. However, for this to apply the terms of the contract must have been made available before OP signed on the dotted line (ie not provided in a separate document after the arrangement was entered into).

Also, whether the provider will indeed go to court over such a small amount is another matter.

Merce

I'm in the same boat and arrived here after searching for similar on Google. I've been trading ethically for 30 years but when I come across unfair practices I think its justifiable to play them at their own game.

I first came across this unfair practice with XLN telecom a few years back and in the end they paid a very heavy price for this type of punitive contract. Large companies write off thousands of small debts every month... they may sell them to debt collection agencies but even then it isn't worth their time going to court.

I agree with your strategy so far of spreading your story across small business forums. This has already probably cost them quite a lot of money as potential new sign ups doing basic research on the company will now avoid them like the plague. If the forum allows tag your posts with keywords like "problem with merchant rentals" "avoid hande pay" etc that will come near the the top of new client google searches. I found these posts very easily.

The next stage for me is to drag things out. Every phone call every letter costs them money. When they call tell them its not convenient to talk... arrange for them to ring you back at time you know you won't be around. Keeping doing it and generally mess them around. Don't get involved in discussion. "All's fair in love and war".

When they eventually get through to you ask them for a copy of the agreement.. delay delay.. hassle and more delay. Check the company details against the company on the contract, you'd be surprised how often these firms change. If the details are different refuse to pay the new company as you don't have a contract with them.

Ask them for clarification of details in the contract.. the folks chasing you often have little knowledge of the contract and have to find out from others. More time and money.

Check the details like dates.. signature etc. You'd be surprised how often the date is wrong... and the details are entered inaccurately wrongly. Any mistake can invalidate the contract.

The whole point being that at some point someone within their organisation says this strategy is costing us money and it isn't worth the cost. You don't want to go to court its a lottery... and neither do they.

Taking these cases to court isn't really worth their time and expense... and the more folks who refuse to pay the more the more people they have to take to court. Although they might try and take one or two people to court to scare other people into paying. It's pretty certain they won't issue summons against everyone. Going to court can be a lottery and the outcomes are far from clear.

Make them an offer in writing of maybe a hundred quid
If they still keep coming after you.. make a few payments equal to your offer then stop. This forces them to open the case again... more time..more hassle. You can set up payments via online banking pretty easy..

Making them an offer and pay it.. it makes you look reasonable and puts the onus on them to justify the extra amount should it ever reach court. Pay it installments at the same monthly amount they were charging but tell them nothing. There is a chance they will file your case thinking you've decided to pay in full. Keep them in the dark. But under no circumstances give them your card details

If you are not limited consider going limited. It changes the status of the business and makes it more complicated for them to come after a now existent business... a % will give up.

Get a call blocker.. and block their number.. force them to contact you in writing by snail mail. It takes up their time and costs money. If they do start sending written letters check the details for mistakes and make a note if it ever goes to court.

In short drag things out.. make it as costly as possible to continuing with their current policy.

NOTE: FTR in thirty years I have never bankrupted a company and have no county court judgements. If people treat me fairly I do likewise.. but in my opinion these companies deserve everything they get.