Mis-sold Business Energy Contracts: Can You Exit an Agreement?

Thousands of businesses are trapped in energy contracts they never knowingly agreed to. Many were misled, manipulated, or outright deceived by rogue energy brokers operating in a dangerously underregulated market.

If your business is stuck in an energy contract that feels wrong – you’re not alone. This raises a crucial question: Can you get out of a business energy contract?

The answer depends on the circumstances. But if you’ve been mis-sold, you could be entitled to claim back thousands of pounds – and we’re here to help.

The unregulated nature of the business energy market

Unlike domestic customers, businesses operate in a non-regulated energy market. There is no price cap, no statutory cooling-off period, and minimal protection from regulatory bodies such as Ofgem.

This lack of regulation has given rise to concerning practices among rogue brokers. Businesses are vulnerable to exploitation – often unknowingly entering into unsuitable contracts with inflated prices and punitive exit terms.

No cooling-off period: immediate legal binding

One of the most significant distinctions between domestic and commercial energy contracts is the absence of a statutory cooling-off period for businesses. Once a business energy contract is agreed, it is usually immediately binding unlike domestic energy contracts which have a statutory cooling-off period of 14 days. 

This creates the perfect conditions for unscrupulous brokers to pounce. With pressure tactics, fast-talking sales pitches and even deception, they lock businesses into long-term, expensive deals before firms realise what has happened.

Common signs of mis-sold business energy contracts

Unfortunately, the practice of mis-selling energy contracts to businesses is not uncommon. Unscrupulous brokers may employ a range of tactics designed to reel in businesses and obscure the true cost and nature of the contract:

• Non-disclosure of commission: Brokers may hide substantial commissions in the energy contracts – and fail to disclose this to the client.
• Verbal agreements passed off as binding contracts: Calls believed to be for quotation purposes may in fact be used to bind the business into a contract, without any written confirmation.
• High-pressure sales tactics: Businesses may be misled with exaggerated claims about rising prices or limited-time deals, pressuring them into making rapid decisions.
• Unclear or misleading contract terms: Brokers may fail to clearly explain key elements such as the contract length, the identity of the supplier, or hefty early termination penalties.

The legal weight of verbal contracts

It is not widely understood that verbal agreements are enforceable in business energy contracts. A simple affirmative response given during a phone call can be treated as a legally binding commitment.

This has led to many business owners being unaware they are in a contract until they receive a welcome letter or first invoice – at which point, exiting the agreement can carry significant financial consequences.

What can you do if you’ve been mis-sold?

If you believe your business was mis-sold an energy contract, there are legal avenues available to challenge the agreement or seek compensation. You may have a valid claim if:

• The broker misrepresented material facts or failed to disclose key information.
• The commission was not disclosed, or was embedded in the contract without transparency.
• The business did not receive a copy of the contract.
• The terms were not clearly communicated, including fees, duration and the identity of the supplier.

In many of these cases, a review of the agreement and surrounding communications by legal professionals like Energy Solicitors Limited (ESL) can uncover grounds for cancellation and recovery of losses.

“We are seeing an increasing number of businesses across the country coming forward with serious concerns about how their energy contracts were sold. In many cases, our legal team has identified clear evidence of misrepresentation, non-disclosure of commission, or agreements formed without proper consent,” said Victoria Myers of ESL. “These contracts can have a significant financial impact, especially when they lock businesses into contracts with over inflated prices for multiple years. At ESL, we are committed to helping businesses challenge unfair agreements and recover the losses they have sustained.”

Protecting your business: key steps

To avoid falling victim to mis-selling in the future, we recommend businesses take the following precautions:

• Request all contract terms in writing before agreeing to any deal.
• Ask the broker to disclose their commission in full – and confirm it in writing.
• Take time to review and compare offers from multiple sources.
• Record your own version of any calls that involve contract discussions or commitments.

Speak to a legal expert today

If you suspect that your business has been mis-sold an energy contract –  or you are concerned about how the agreement was formed – we strongly advise seeking legal advice.

Contact us today on info@energysolicitors.co.uk or call 0800 059 0122 to discuss your situation and recover lost funds. You don’t have to navigate this alone.