Unethical Photocopier agreement practise

Scottidoos

Hello forum members,

I have come into a new employment and have inherited a contractual situation I am having difficulty getting advice on.  Can you help?
When reviewing agreements to bring myself up to spec on what needs dealing with in the company, I found that a previous employee leased a new photocopier/scanner back in 2017.  Generally not an issue as some members have had with cost per copy etc, however, I found that the copier provider had produced a lease of the equipment for 36 months, but in the small print, the service contract is for 60 months.  There are minimum charges for usage on the service terms and the usual early termination charges.  However, there is nothing directly linking the two different agreements.  The lease requires a 90 day notice period to terminate, even at the end of the minimum hire period or it will automatically roll over for another 12 months.  There is no obligation to continue beyond the 36 month minimum hire period.

On the other hand, the service contract is a minimum contract period of 60 months, again with a termination notification period.

I contacted the provider of the machine and the finance company and gave notice of termination at the 36 month point (in plenty of time to avoid the roll-over).  The Finance company confirmed their acceptance and also wrote saying that we have no title to the machine and it would remain their asset until such time they sold it to a 3rd party.  I enquired if I could buy it out at the end of the period - guess what?  They would only sell it to the vendor who had leased it to us in the first place - so they have this sewn up - it is a closed market.
Still there is no responsibility on the hirer to continue beyond the minimum hire period.

Shortly after this exchange, the vendor of the machine came back to us and says, "sorry, we got that wrong - you have a longer service agreement and you will continue to be liable for these costs or for the buy out costs - unless you agree to sign up to a new lease!!"  If you agree to a new contract, then we would waive the remaining 24 months on the current agreement!!!

The agreement was a pre-printed document on which the equipment details, price and terms were filled out by hand - no doubt on the day the salesperson came to the company!  This document only mentions the 36 month lease term.  On the back however, is the fine print of the service agreement locking the customer into a 60 month service agreement and a host of other terms (which are not currently a concern unless I have to buy the contract out).

I am not concerned at the incredible minimum % annual increase and the other conditions set out in the fine print - my question relates to selling a lease for 36 months and "writing in" service terms that are for a longer period, in this case 60 months.  In my book this is mis-selling and morally unsound, however in the unregulated photocopier/managed print industry, this does not seem to matter.  Can we be held to the terms of the service agreement even though we can legally de-hire the equipment at the end of the minimum lease period and not enter into a post-lease hire agreement to keep the machine?  Can the vendor claim the quarterly fee and minimum copy charges under the terms of the service agreement even though there will be no equipment to service?

Any experience or advice on this?

Fosterdog

As you were not party to the original contract you cannot make a claim of mis-selling, for all you know it was your predecessor who requested the longer term, or the whole thing could have been explained to them clearly before them agreeing.

As this is a business contract the vendor can claim whatever it says they are entitled to in the contract that was agreed to, it is not unusual in business leases for equipment and a separate service for the contracts to be different lengths to enable you to upgrade or downgrade during the contract. Most photocopying/printing contracts work like this, as do things like vending machines, and even business vehicle leases.

Ectophile

Photocopier contracts are notorious for having all sorts of nasty surprises hidden in the small print.  Assume all such contracts are unethical unless you have read every word of them, and had them second-checked by your legal department.

Unfortunately, businesses don't have consumer rights.

unholyangel

Scottidoos said:

The agreement was a pre-printed document on which the equipment details, price and terms were filled out by hand - no doubt on the day the salesperson came to the company!  This document only mentions the 36 month lease term.  On the back however, is the fine print of the service agreement locking the customer into a 60 month service agreement and a host of other terms (which are not currently a concern unless I have to buy the contract out).

This is the only bit of interest imo, that might give wiggle room. For example, the first page is signed at the bottom and the reverse is just small print. Even then, you still need to consider whether legal action will be worth it and you'd need to have a solicitor review the documents to get an accurate opinion on whether it has any reasonable prospect of success. 

tehone

Its not a consumer rights issue. It was a B2B transaction.
Personally in this situation before I've just played hardball and the photocopier company has backed down.

Scottidoos

Thanks for your comments everyone.

It is as I thought!  We will have to suck it up and keep the machine on a secondary hire for the next 24 months or pay up the £3500 to get out of the service agreement.

Maniak

It may be possible that the 60 month term for maintenance could have been a mistake. Support and maintenance contracts tend to have the same term as the term of the lease, simply because some of those obligations such as annual maintenance wouldn't be able to happen if the printer is no longer in your possession i.e. physically impossible. It's also common to for the S&P to have a term that says if the lease terminates then so will the S&P, again for reasons that you can't provide S&P if the core contract is no longer in existence.

The doctrine of frustration or the mistake argument might be available to you and that could discharge you from your obligations under the S&P contract. This all depends on the business' appetite to either play hard ball as suggested or, simply going down the routes you've suggested.