Garden equipment hire, cancelled

LarryR

Not sure if this is the right forum, please tell me if not.

A few months ago we were organising an event and wanted to hire some garden equipment. We found a company that were able to supply the items and negotiated a price for the date, via email. The company said they would send us a contract. As the event got closer, the weather looked like it wasn’t going to be favourable, so we decided not to go ahead with the party and as we hadn’t received a contract, let alone signed one, or paid any money, we guessed we wouldn’t be receiving the equipment anyway. I emailed the company about 4 days before the event was supposed to happen to say that regretfully the event was off and we wouldn’t be needing the equipment. The day before the event date, I realised I hadn’t heard back from them, so I rang the company to confirm they had received the email and that we weren’t having the equipment. They were shocked. They said they hadn’t received the email and even if they had, they said, it would have been too late - the equipment was ordered and I had to pay the full amount. I explained we never received a contract, hadn’t signed anything and hadn’t paid anything. It never occurred to me that a company would supply anything without those things in place.

I said I'm sorry but there's no way I can pay the full amount, especially if the event is not going ahead. They have subsequently emailed that they have no choice but to pursue me through the courts to recover their costs - which is the full amount (about £1125) 

Do I have any rights here? Were my emails confirming address and date enough of a legally binding contract to mean I have to pay? Or without a signed contract will it not stand up in court? Are they just hoping I will hear the words 'legal proceedings' and be scared enough to pay?

Aylesbury_Duck

Is this is a B2B transaction?  It may affect how this plays out.

As I understand it, the company have reasonable grounds to believe a contract was formed.  You booked the equipment, they intended to supply it, and I don't believe a written contract or payment is required to prove the existence of a contract.

They have a duty to mitigate their losses, so assuming they do take you to court, they should be demonstrating that they minimised their costs, e.g. could they have hired the equipment out elsewhere at very short notice?

I'm afraid that I see their argument and I think it's valid and defensible.

user1977

There's no need for contracts to be signed, or even in writing. But you do have writing here, so it may depend on exactly what the emails said e.g. "they would send us a contract" might mean the correspondence already formed a contract but they would send out written confirmation, or it might mean "before we enter into a contract with you we require you to fill this in".

pbartlett

A contract is formed by you specifying what you want, receiving a price and then you agreeing to that. It seems all this was done by mail - so yes, a written contract.

4 days notice does not seem long for them to mitigate their losses and hire to someone else, especially if the weather is bad. However, they would not have had to deliver and collect etc so this would reduce their expenses a bit.

You might be able to get out of it by claiming a reasonable person would not have realised a contract was in actually place as they said they would 'send you one'. If it comes to court, you could argue this.

It seems like you will have to pay, but maybe not the full £1125

LarryR

Thanks for the replies.

So if we went to court and I lost, would I also have to pay their legal fees too?

If I have to pay, would I pay the full invoice amount, or a proportion, as surely some of it is profit margin? Even if it was too late to cancel the delivery and they had to pay everyone? They said they contracted out to a third party to supply the equipment. 

As for a contract being formed through the exchange of emails, surely there were no terms and conditions, so I didn't know that I had to give more than 4 days notice to cancel, etc. That's usually what a contract is for, so both parties are clear about their obligations and their responsibilities? 

MattMattMattUK

LarryR said:

Thanks for the replies.

So if we went to court and I lost, would I also have to pay their legal fees too?

Yes, but in a small claims court their cost will be low, unlikely to be more than a hundred pounds.

LarryR said:

If I have to pay, would I pay the full invoice amount, or a proportion, as surely some of it is profit margin? Even if it was too late to cancel the delivery and they had to pay everyone? They said they contracted out to a third party to supply the equipment. 

It depends, as mentioned above they have a duty to attempt to mitigate their losses, but if they cannot then they can pass those on. Yes there will be a profit margin, no they do not have to give that away to reduce your cost. 

LarryR said:

As for a contract being formed through the exchange of emails, surely there were no terms and conditions, so I didn't know that I had to give more than 4 days notice to cancel, etc. That's usually what a contract is for, so both parties are clear about their obligations and their responsibilities? 

That does not negate the issue, you might be able to argue the case with them and come to a compromise, but it does not give you a get out of jail free card.

As requested above, was this a B2B transactio? As you mention with the event not going ahead you can not afford to pay.

LarryR said:

Are they just hoping I will hear the words 'legal proceedings' and be scared enough to pay?

Maybe, but they will probably get something out of you in court, however it will be a pain in the rear for both them and you and takes time, so you are going to be better off negotiating. 

pbartlett

Without any explicit T&C they say you can't cancel and you could easily argue that you thought it was 24 hrs notice.

See if Google has any info on the 'default' legal cancellation terms of a contract when there are no T&C

Do they have a website - if so we can look for you.

Also, could you post the exact wording of the email where they confirmed the booking but said they would 'send you a contract', as you may be able to argue that the very fact they used those words meant that they believed a contract had not yet been formed.

the_lunatic_is_in_my_head

LarryR said:

Thanks for the replies.

So if we went to court and I lost, would I also have to pay their legal fees too?

If I have to pay, would I pay the full invoice amount, or a proportion, as surely some of it is profit margin? Even if it was too late to cancel the delivery and they had to pay everyone? They said they contracted out to a third party to supply the equipment. 

As for a contract being formed through the exchange of emails, surely there were no terms and conditions, so I didn't know that I had to give more than 4 days notice to cancel, etc. That's usually what a contract is for, so both parties are clear about their obligations and their responsibilities? 

OP as others asked was you hosting an event as a business or having a party at home as a consumer? 

If you are a consumer and didn't walk into their place of business uninvited to acquire their services then the trader must provide certain information in order for the consumer to be bound by the contract. The information is extensive and can be found here:

https://www.legislation.gov.uk/uksi/2013/3134/schedule/2/made

If they didn't provide all of this information then you are not bound by the contract. 

There is also the right to cancel a distance contract, what you described would likely be a service and you still have the right to cancel, typically for a service this is 14 days after the day on which the contract is entered into.  

If the trader has not provided the information specifically relating to the right to cancel in the above link the cancellation period is extended to 1 year and 14 days. 

There is a limit of application (i.e a contract type to which the right to cancel does not apply) which is:

the supply of accommodation, transport of goods, vehicle rental services, catering or services related to leisure activities, if the contract provides for a specific date or period of performance.

which would likely cover your contract but I believe for that limit to apply it must be communicated to you as part of the required information. 

You have already sent an email to cancel (you should double check you sent this to the correct email address and if not resend asap) so it is now down to the company to show they have complied with the information requirements. 

Whether you wish to point this out to them or wait for the court process to start and use this as a defence is probably up to you. 

As others have said their loss is their claim but there is the possibility of that loss being the full contract price if they have outsourced most aspects to a third party.  

Additional costs awarded in small claims are typically very limited, the company should send you a letter before action (which details what is due and a deadline for payment) before actually filing the claim (and may not be awarded costs if they fail to do this), I believe in a consumer to business case that the consumer can request the case is heard at their local court which may put a company off of chasing a small amount. 

LarryR

pbartlett said:

Also, could you post the exact wording of the email where they confirmed the booking but said they would 'send you a contract', as you may be able to argue that the very fact they used those words meant that they believed a contract had not yet been formed.

"Once I have this information I will send over a contract and a deposit invoice". They were asking for address, date, start time, end time, etc. all of which I supplied.

Aylesbury_Duck said:

Is this is a B2B transaction?  It may affect how this plays out.

Sorry, forgot to answer this. No, it was a private transaction.

I'm not even sure if I should be searching Google for 'Sale of Goods' or 'Sale of Services' as it's a bit of both? 

Jumblebumble

LarryR said:

pbartlett said:

Also, could you post the exact wording of the email where they confirmed the booking but said they would 'send you a contract', as you may be able to argue that the very fact they used those words meant that they believed a contract had not yet been formed.

"Once I have this information I will send over a contract and a deposit invoice". They were asking for address, date, start time, end time, etc. all of which I supplied.

Aylesbury_Duck said:

Is this is a B2B transaction?  It may affect how this plays out.

Sorry, forgot to answer this. No, it was a private transaction.

I'm not even sure if I should be searching Google for 'Sale of Goods' or 'Sale of Services' as it's a bit of both? 

Good
Personally there is no way I would be paying because

It is absurd for anyone to suggest that you enter into contract verbally when someone says "I will send you a contract"
Their intention is clearly that you agree to the terms that you have not yet seen
How would anyone know that the contract does not contain ridiculous  terms ?
( ie We reserve the right to cancel this agreement at any time and for no reason)

The contract requires a deposit. No deposit no contract

Does anyone seriously imagine the company would  honour their side of the bargain if they had a request for renting  the same equipment  to someone else who  was desperate enough to  pay double the cost that came in  before they  sent you the contract?

You as a private individual are protected by the unfair contract rules and this clearly applies here

I think a District Judge would kick this in to next week assuming that company employed solicitors who were stupid enough to try

pbartlett

Good advice above. I would only add - be careful what you email - eg don't start talking about how you should be able to cancel the contract as this would imply that you believed a contract was in place. I would not even contact them again as you 'cancelled' on the phone.