Business Gas Contracts and Cooling-Off Periods: What You Need to Know

The legal position — who has cooling-off rights

Under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, a 14-day statutory cooling-off period applies to:

• Consumers (private individuals not buying for a business). Most domestic energy customers.
• Micro-businesses in limited cases — there’s a separate set of energy-specific rules in the Ofgem licence conditions that gives micro-businesses some extra protections at renewal.

A “micro-business” for energy purposes is one with fewer than 10 employees AND either annual turnover below £2 million OR annual gas consumption below 293,000 kWh / electricity below 100,000 kWh.

Larger businesses — anything above the micro-business threshold — have no statutory cooling-off right on energy contracts. Once signed, the contract is binding.

When cooling-off DOES apply

There are two specific scenarios where a business contract qualifies for the 14-day statutory cooling-off, even for larger businesses:

1. Doorstep sales. If a salesperson came to your business premises unsolicited (a “doorstep contract”) and you signed there and then, you have 14 days to cancel. This was a common scam in the 2000s and is the reason the rule exists.

2. Distance contracts where the supplier failed to provide proper pre-contract information. If a phone-based or online contract didn’t supply you with all the legally required pre-contract information (clear pricing, contract length, supplier identity, complaints procedure, etc.), the 14-day clock starts from when they finally do — and can extend up to 12 months.

Micro-business renewal protections (Ofgem rules)

For micro-businesses specifically, Ofgem licence conditions impose a few rules at renewal that act like a soft cooling-off:

• The supplier must give you renewal terms in writing at least 60 days before your contract end date.
• You can issue a termination notice up to 30 days before contract end to prevent auto-rollover onto deemed or out-of-contract rates.
• Rollover contracts (auto-renewing fixed terms) are banned for micro-businesses. If your contract ends and you’ve not signed a new one, the supplier moves you to a deemed/out-of-contract tariff — which is expensive, but at least you can leave it with 28 days’ notice and zero termination fee.

The four traps to watch for

Trap 1: Verbal contracts on recorded sales calls. Many third-party intermediaries (TPIs) sell contracts over the phone. Once you’ve said “yes” on a recorded call, that’s a binding contract — even before any paperwork is signed. Get the contract details emailed to you in writing before saying yes to anything.

Trap 2: Brokers signing on your behalf with a Letter of Authority. An LOA gives a broker the ability to obtain quotes — it does NOT give them the right to sign you up to a contract. Some less-scrupulous brokers have signed contracts and pocketed commission without the customer’s knowledge. If you’ve signed an LOA, get it in writing that it does not authorise contract signature.

Trap 3: “Cooling-off” written into the contract that’s not actually 14 days. Some suppliers offer a voluntary 7-day or 5-day cooling-off period in the contract terms. This is a goodwill gesture, not a legal right — read the contract carefully to see if it applies and how to invoke it. Some require written notice by recorded delivery.

Trap 4: The “objection” window with the new supplier. When you switch suppliers, the new supplier sends a switch request that goes through a 14-day objection window with the old supplier. During that window the old supplier can object on specific grounds — most commonly an outstanding balance or an in-force contract you didn’t realise you were still in. If they object successfully, your switch fails and you’re stuck with the old supplier. This isn’t a cooling-off right but it functions a bit like one.

What to do if you signed something you shouldn’t have

1. Stop signing anything else and don’t pay any new direct debits to the new supplier yet.
2. Email the supplier in writing within 14 days, even if you don’t think you have a statutory cooling-off right. Cite the doorstep sale / lack of pre-contract information if either applies. Ask for the contract to be cancelled.
3. If the supplier refuses, raise a formal complaint via their published complaints procedure. They have 8 weeks to resolve it.
4. If unresolved after 8 weeks, escalate to the Energy Ombudsman (free for businesses with under 50 employees or under £6.5m turnover). The Ombudsman can order a contract cancellation in cases of mis-selling.

How to avoid the problem altogether

• Never sign anything on a sales call. Always say “send it to me in writing” — and then read it.
• Diary your contract end date and renewal window. Aim to start renewal conversations 90 days out, not 14.
• Use a broker, not a single supplier’s salesperson. A broker has to find you the best deal across multiple suppliers. A direct salesperson sells you their own product.
• Read the termination clause before signing. 30 days’ written notice is normal. Anything longer (60 or 90 days) is unusual and worth questioning.

Working with Clearsight

We never sign anything on your behalf without written confirmation, we explain termination windows on every contract we recommend, and we’ll renegotiate or move you if the supplier we’ve sourced ends up uncompetitive at renewal. No upfront fees.

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Related guides: What is business gas?, Out-of-contract gas rates, What is a deemed contract?, Business gas pillar.