Deemed Contracts

Deemed Contracts

 

Charges under a deemed contract can be expensive. Rates of 80% higher than under an agreed contract are common.

 

If you have not signed a supply contract or agreed one on the phone, you could be on deemed rates as are 10% of UK micro businesses.

 

A deemed contract as the name suggests is a contract which has implied terms in the absence of any formal arrangement between a commercial energy consumer and a supplier.

 

Deemed contracts can occur under the following circumstances -

 

* When a business occupies new premises and the gas and electricity are already connected  the business owner may feel they need take no action and simply wait for a bill to arrive. Amcub has encountered customers like this who continued to take supply despite not receiving a bill. When the bill finally arrives ( say after a year ) it can be huge. Furthermore, where there is a large debt, the customer will not be able to switch if they are unable to pay the bill in full, leaving them at the mercy of the energy supplier.

 

* A customer has notified the supplier that they wish to terminate their contract upon it's expiry ( intending to find an alternative supplier ) but then forgot. The account can then be charged at Deemed rates.

 

* A contract expires but has not specified what will happen on expiry ( eg, automatic roll over)

 

 

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