Over the last few years, with the change to digital phone services and telephone system, we have seen several new companies entering the market. Whilst there are many high quality and reputable companies, since there is minimal regulation with regards to business to business transactions, we have also seen the emergence of a significant number of cowboys and sharp practice. If the deal is too good to be true, it probably is A common tactic is for a salesman to call out of the blue, or even to attend your business premises ‘for a quick chat’. Whilst such sales tactics are legitimate, they are also open to abuse by salesmen that mislead and make promises that are not fully realised in the actual contract. If you have not arranged for a salesman to attend your premises we strongly advise caution. Do not be talked into entering a contract that you have not considered and may not need. Review all contractual terms before entering into any agreement If you are minded to continue, do not sign any contract or enter into any agreement without first getting the entire deal proposal in writing and reviewing and understanding all contractual documentation. Given the highly technical nature of telephone lines and systems, a high quality and reputable company will have no objections to providing this information. Take your time. These contracts regularly exist for periods of up to seven years. You are not signing this contract for today’s needs, but for where your business will be tomorrow. Unless you have a strong business plan and are fully aware of your needs in advance of the contractual discussions, we would advise that you take any information away and consider it in detail. If the salesman refuses to provide this information in a written format, or suggests the deal is time sensitive and needs to be agreed immediately, then walk away; it is not worth it. But I can change my mind. I have a cooling off period, right? Wrong. Remember, this is a business to business transaction. There is no automatic cooling off period required by law. The requirement for the goods or services offered to be of satisfactory quality or fit for purpose can be excluded within the contract. Whilst some terms can be challenged after the event, they are the exception rather than the rule and the assumption should be that you will be bound by any agreed terms. What should I look out for? 1- Who are you contracting with? It is not uncommon for the salesman to be an agent working on commission for a separate company. If that is the case, their relationship with you is likely to end once the agreement is signed and there is an increased risk of being misinformed or misled. 2- Is there an undertaking to settle the cancellation fee for your current deal? This is a common aspect of these contracts. However, you need to be warned that the detailed terms and conditions in most contracts will limit the amount of this payment. In the past, members have entered these contracts expecting cancellation fees to be paid in full only to find the fees were higher than the limit in the agreement and that they were liable to thousands of pounds. 3- What are you agreeing to. These contracts can include line rental and the provision of internet services to your business. However, they may also include the leasing of equipment such as telephones and routers. Are you buying or leasing any equipment provided, and, if so, how long is this lease and what happens to the equipment at the end of the process? Members have regularly found themselves entering into detailed and long term lease agreements, only to find the equipment will never be owned by them and is quickly outdated. 4- Are the fees fixed, or can they be increased, and, if so, how? Members have regularly found themselves with cost estimates fixing the costs for five years or more, only to discover later that the contract includes the power to increase costs automatically or at the telephone company’s discretion. 5- How do you cancel the contract. All contracts come to an end. It is not uncommon for these contracts automatically to renew unless a set notice is given. In the past, members have found themselves expecting an end to the agreement after five years only to discover that because they have not given the correct notice to the other side the contract has renewed for another year or more. Conclusion Unless you have arranged for a quotation for goods and services, do not, under any circumstances, enter into an agreement without first getting the details of any quote in writing, along with the company’s terms and conditions. These should be reviewed at your leisure before any final decision is made. If you are unclear as to your current arrangements, you should have a detailed conversation with your provider to ensure you understand any contractual clauses, charges and fees that may apply if you decide to change. If you have any questions about what is being offered, do not sign the contract. This is one area of law where prevention is significantly easier and more cost effective than cure. Remember, these contracts are regularly five or even seven years long. Any legitimate company will be seeking to establish a long term relationship which is mutually beneficial to both parties. Any company refusing to provide a detailed quote and review should be avoided. As always this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate. Motor Industry Legal Services Motor Industry Legal Services provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.