Unfair Business Contracts

[brokenrangerover]

Hello.

 

Looking for some advice on unfair B2B contracts. I know this is a consumer site, but hopefully looking for some discussion / collaboration as I know I'm not the only one in this situation.

 

I invited a salesman from a well known HR company to come and discuss being our HR department.

 

I did this after attending one of their seminars, which they told me as an employer, I could face all sorts and levels of costs if there was an employee giving problems.

 

I discussed the contract with the salesman on my premises, in front of a witness and he told me that if I changed my mind after signing, I could cancel at any time, giving 6 months notice in writing. As I was new to this and not experienced in HR matters myself, I agreed on the basis that if it all went wrong, I would only be liable for 6 mths of payments. I thought this fair and reasonable.

 

After a good meeting, jovial exchanges and of course the understanding of the 6 mth thing that he said was in the contract, I signed. The contract was tucked away in a presentation folder by him and handed to me with lots of leaflets to read.

 

What I actually signed had small print saying that there was no provision for early termination of what was a 5 yr contract. I found this out 2 yrs after signing! Obviously I am a trusting person, but I don't expect to be sold something that I haven't been sold, if that makes sense.

 

The service provided thereon has been frustrating, shocking and not as described / presented in the seminar. When I did have problems, my confidence in their advice has been zero and I used a local Employment lawyer at a fraction of the cost.

 

It can be best described like this:

 

1. I sell you a contract and explain verbally that for the next five years I will make you a cup of tea whenever you like. I will make sure it has just the right amount of milk and sugar and strength to your liking. I tell you (in order to get you to sign and earn my commission) that if you don't like my tea making services, or if you go off tea, or for some medical reason can't drink tea anymore, you can cancel at any time by giving me six months notice in writing.

 

2. You sign a completely different contract with no provision for early termination.

 

3. I then, after you have signed, tell you where you can buy a kettle, cups, cutlery, milk, tea bags and sugar. I give you written instructions on how to make the tea. Neither myself or any of my team will actually come and make the tea for you.

 

4. You try to cancel - I employ corporate bullying tactics that force you to pay for 5 yrs.

 

5. You can cancel, by giving notice not later than 6 mths before the 5 yrs is up. If you are a day late cancelling, I automatically renew your contract for 5yrs without consultation.

 

My questions are:

 

1. To what extent is a verbal discussion valid as part of the contract you signed, even if the verbal sale was lies in order to get you to sign and you weren't given the chance to read it fully before signing because you trusted the person selling?

 

2. Is it unfair to insist one still owes money for 5 yrs when I (the HR company) haven't delivered what was promised and gave shoddy advice and forced you to go elsewhere in order to get things sorted?

 

I won't be naming the company involved but judging by the reviews on them on the net, it wouldn't be too difficult to guess who they were. So if you have guessed, please don't mention their name. (He who must not be named!)

 

PS I have cancelled my contract in writing and paid 6 mths of payments and not used the companys services for the last 12 mths as its not up to scratch.

 

Thank you x

[BankFodder]

Contract between businesses – unlike contracts between businesses and and consumers – are not generally protected by any legislation.

 

The assumption is that businesses have equal bargaining power and they don't need to be protected from each other. This of course is entirely false because if you imagine for instance a utilities company or a bank and a small business of only a few people without the expertise and the resources of the larger company, you soon realise that this is nonsense. In fact you will find a huge number of examples where large companies take advantage of the so-called equality in a business to business environment and they dominate and bully and exploit their naive small business contracting partners.

 

So when you are in a business to business contract, then to a great extent you have to rely on basic common sense – and this includes reading the contract. I'm sure that you have yourself said in passing to other people or jokingly – "always be careful of the small print…". Now you know it's not a joke and now you know why.

 

There is something called the "parol evidence rule" which basically means that things said outside the written contract cannot be included as part of the contract.

 

There are exceptions to the parole evidence rule – particularly where there are matters which have not been dealt with by the written agreement and so therefore there are gaps which have to be filled and extrinsic evidence such as conversations or previous dealings can be used to fill those gaps. There is also something called the "Contra preferentum rule". This means that where there is an ambiguity in the written agreement then the ambiguity must be interpreted against the person relying on the ambiguous term – normally the stronger party.

 

In this case from what you say, there is a very clear cancellation term and although it is five years which in my view is far too long – especially when one is dealing with a personal services contract, where quality of service can be so variable – the term seems pretty clear and I find it very difficult to imagine that parole evidence can be brought in to challenge the term.

 

I'm sorry to say that if you are running a business then I find it a bit extraordinary that one doesn't take one's time and read the contract and find out what one is getting into. Especially when one is dealing with contracts over a long period of time, one would at least make sure that there are stages for review of the quality of the services or products provided under the contract and break clauses which allow the contract to be terminated without penalty in the event that there is a problem.

 

You seem to have thrown these natural cautions to the wind.

 

However, because there seems to be no provision for termination based on the quality of the contracted service and no quality control break clauses, I think that it would be reasonable enough to imply a right of termination based on contractual breaches.

 

In order to do this I think that you need to list out very carefully what was expected from a correctly functioning contract and then compare it to a list of what you feel has not been achieved or what has been substandard over the period of the contractual service so far.

 

You can come back here and discuss it if you want. However I would listed out all very carefully and then I would write to the company and tell them that you are very concerned about the way the contract is being conducted and say to them that although it is a fixed term contract ever five years, you consider that you have rights to terminate if the service they provide is not up to scratch. You then point out to them in what ways you feel that the contract has fallen below an acceptable standard and you give them time to remedy it. You point out to them that if they will not improve the standard and address the points that you are making then after a certain date you will then terminate the contract.

 

It seems to me that this is the way to go ahead.

 

I'm sorry to have a go at you but consumers get protective legislation because they are clearly the weaker and innocent party and they need protection from their dominant contracting partners. It seems to me that businesses like yourself need protective legislation to protect you from yourself

[steampowered]

1. To what extent is a verbal discussion valid as part of the contract you signed, even if the verbal sale was lies in order to get you to sign and you weren't given the chance to read it fully before signing because you trusted the person selling?

It won't be part of the contract due to the parol evidence rule. You could possibly raise a legal claim for "misrepresentation" which would allow you to rescind the contract if the claim is made successfully. The problem is that it will be very difficult for you to prove what you were promised verbally by a salesperson 2 years ago.

 

 

2. Is it unfair to insist one still owes money for 5 yrs when I (the HR company) haven't delivered what was promised and gave shoddy advice and forced you to go elsewhere in order to get things sorted?

If the HR company have breached the contract, then that would be a good reason to refuse payment. Ideally you would be able to find something in the contract or the leaflets which hasn't been delivered. Alternatively you can rely on their obligation to perform services with reasonable care and skill under the Supply of Goods and Services Act 1982.

 

 

If the HR company has seriously breached the contract, you are entitled to terminate the contract by writing to them (unless the contract prohibits you from doing that - you need to read what it says about termination).

[brokenrangerover]

Thank you for your responses.