When we talk about energy contracts, many people assume that this will be in paper form, and you hand sign the contract to make this legally binding. However, there is more than one way to legally ‘sign’ business energy contracts; our guide below explains this in more detail.
What types of business energy contracts are there?
Here we run through the different types of contracts you will be offered when agreeing on a new business energy tariff.
Paper Contract
A paper contract is a contract provided by your TPI or directly from your business energy supplier that is a hard copy of the contract. This contract will include all the terms and conditions you agreed with the energy supplier.
It will include the following:
- Your registered business name
- Your company registration number (if LTD)
- Your registered business address
- The supply address
- The full name, home address and DOB of the person responsible for the contract. (This isn’t always requested, but most suppliers want this information, even for limited companies)
- Your agreed tariff costs include the rates, the standing charge and any commissions included if signing through a broker.
- The contract term
- Your direct debit amount and due date
- The total annual cost of the contract
- The terms and conditions of the contract include fees for early termination, securing your ability to pay when the supplier could stop your supply and much more.
As there is no cooling-off period for a business energy contract, ensure you read this in full and agree to all the terms before signing.
Once you have hand signed this document, you must retain a copy for your records and return it to your broker or supplier as quickly as possible.
This is because business energy prices can change at any time, and if the contract is not with the supplier as soon as it is signed, it can be invalid if there has been a price change.
You can scan a copy of this contract and email it back to your supplier or broker to ensure you don’t miss out on the agreed-upon prices. You could also post this, but we do not recommend it as it could take too long and is no longer valid when it arrives.
Digital paper contract
A digital paper contract is a soft contract that your broker or business energy supplier provides via a digital platform that will be emailed to you. The used platform will trace your IP address and allow you to sign the document digitally.
This will then automatically return to your broker or business energy supplier, who will be notified by the platform you have signed.
Just like a hard copy of a business energy contract, your digital paper contract will also include the same information as the paper contract above.
Once again, ensure you read carefully, as there is no cooling-off period. Once you have signed and finished, you will be sent a copy of the signed contract – make sure you put this somewhere safe in case you have any questions.
Verbal Contract
Most brokers and business energy suppliers like to make a verbal contract while you are on the phone. This is legally binding, and you do not always receive a copy of this in soft form or a copy of the recording.
A verbal contract can take around 20 minutes to complete; as such, you could miss some of the terms, so make sure that you listen carefully to everything being said before you confirm you agree.
What to look out for:
The caller will be reading a script, and they must read the contract verbatim.
They will read out all the information that you would receive in a soft or hard copy of a contract, such as:
- Your registered business name
- Your company registration number (if LTD)
- Your registered business address
- The supply address
- The full name, home address and DOB of the person responsible for the contract. (This isn’t always requested, but most suppliers want this information, even for limited companies)
- Your agreed tariff costs include the rates, the standing charge and any commissions included if signing through a broker.
- The contract term
- Your direct debit amount and due date
- The total annual cost of the contract
- The contract’s terms and conditions include fees for early termination, securing your ability to pay when the supplier could stop your supply and much more.
When listening to the verbal script, make sure that you pay close attention to the rates, totals, and contract terms and ensure that the information you provide is accurate.
Sometimes a verbal add-on to this agreement will need to be done at a later date – the caller does not have to read the entire script out, but they will need to confirm the time and date and their name as well as your company details and outline what is different from the original call. You will need to agree to this change in order for the contract to be binding.
Lastly, ensure you ask for a copy of your verbal agreement, including any verbal add-ons, to be emailed to you.
This will ensure you have a copy of the contract and what has been agreed upon. Brokers and business energy suppliers only have to keep a copy of the agreement for 1 year, so if you need to dispute the contract in the future, you will need your copy.
We also suggest that you request that everything be sent via a soft copy, including the terms and conditions, for your future reference.
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