Can I cancel a new business energy contract after agreeing it?

The starting position

Unlike many consumer purchases, a business energy contract doesn't come with a cooling-off window. Ofgem considered one in its microbusiness review and did not bring it in. So if you have agreed a deal, even by phone, assume it stands unless you can show a problem with how it was sold.

Four routes worth trying

1. Check a contract really exists

Look at the paperwork. Was a price agreed? Do the Principal Terms match what you were told? If the supplier can't show you agreed, say so in writing.

2. Ask for a goodwill release

No rule requires a supplier to agree, and we found no supplier that publishes a cancellation window, but it costs nothing to ask, especially before supply has started. Ask in writing and keep the reply.

3. Complain about the sale

If you were given wrong information, complain to the seller. See what to do if a broker mis-sold your contract.

4. Escalate to the Ombudsman

Microbusinesses and small businesses can use the Energy Ombudsman after the supplier has had 8 weeks, or straight away with a deadlock letter, then within 12 months of that letter. Brokers that are members can also be complained about.

The cost of leaving anyway

If none of these works, you can usually leave a fixed-term contract by paying the early termination fee in it. Get the figure in writing first, then compare it with the cost of staying. Our guide to exiting a business energy contract early shows how.

Example: if staying costs you £600 a year more than a better deal, and the exit fee is £1,000 with a year left, paying to leave would not make sense. If there are three years left, it might. The figures are illustrative.

Preventing it next time

• Never agree on the first call; see phone agreements.
• Get the Principal Terms in writing and read the exit-fee clause.
• Check the broker cost shown in them.

Keep the evidence

Whichever route you take, build a file now. Save the welcome email, the Principal Terms, any call recording reference, and a note of what you were told and by whom. Take screenshots of web forms before they disappear.

A dated timeline helps if you later complain to the Energy Ombudsman, whose process requires you to have tried the seller's own complaints procedure first.

Do not stop paying as a protest. Unpaid bills can lead to debt collection and make it harder to switch later.

Who can help for free

Citizens Advice gives free guidance to small businesses on energy problems. Ofgem does not yet regulate brokers directly, so it will not take up an individual dispute about a sale for you. A solicitor can advise if large sums are involved. Be sceptical of any firm that offers to cancel a contract for an up-front fee.

Next steps

Write down what you were promised, gather emails, and complain in writing within days, not months. Citizens Advice also gives free help to small businesses.