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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 71146
Experience:  Over 5 years in practice
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We are a small business based in Sheffield and looking to move

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We are a small business based in Sheffield and looking to move premises in June this year. I called Chess Telecom who are are line provider and was told initially that we had a verbal contract in place that expires in Dec 2014, the termination fee would be £1730. On hearing my response she asked how many employees we had and when she found it was less than 10 told me that we were covered under consumer law and would have to give 30 days notice and no termination fee. Subsequently they have retracted this and now say that we will be in breach of contract and require a termination fee. My questions are as follows:
does the verbal contract stand-they say they have a recording of it?
should the verbal contract be followed up in writing with notice of a cooling off period?
what is my best course of action now-I have no wish to stay with this company?

Thank you for your question. My name is XXXXX XXXXX I will try to help with this.

On what basis do they want a termination fee of £1730?
Customer: replied 4 years ago.

They said this would be the balance outstanding for the balance of the contract term

A verbal contract is binding even if not followed up in writing provided there is no dispute over what was agreed.

However there is no contract or agreement in respect of them giving you a 30 day cooling off period and you being able to cancel with no penalty.

In that respect, they would be able to rely on legal mistake whereby the person who told you that simply got it wrong.

If they have a recording of the telephone conversation, they can rely on that.

Unless they said there was a cooling off period, there is no cooling off period if this is a commercial contract and not a consumer contract for a private individual.

However there are not entitled to the full balance of the termination fee for a service they are not providing.

What they are entitled to is damages in respect of their loss of profit in respect of the period between now and the end of the year.

You might want to make them an offer to settle for perhaps £500 failing which if they issue proceedings, you are going to have to defend in court on the basis that they did not provide the service and therefore they are not entitled to the full amount but only their loss of profit.

Can I clarify anything for you?

Customer: replied 3 years ago.

Does the fact that they gave me information confirming that there would be no termination fee, just 30 days notice have any bearing on the original contract?

I did say in my earlier answer, that with regard to them giving a verbal confirmation that there would be no termination fee, they would be able to rely on legal mistake, if the person you spoke to simply got it wrong when saying there was no termination fee and only needed 30 days notice.

If this goes to court, by all means raise it as an issue but I think it's 50-50 as to whether it would be accepted by the court or not as a valid defence.

For the amount they are claiming it is certainly worth saying that you relied on what the person said on the telephone when deciding to terminate if they decide to take this all the way to court

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