Verbal contracts: A CASE STUDY
Mr Jones is self-employed as a painter and decorator. He recently received a call from a firm claiming that he has agreed to place an advert with them, over the telephone. They claim that he cannot cancel the contract with
them and that he must pay their invoice of £350. Mr Jones does not recall any conversation to this effect, and does not normally agree to such things over the phone.
What is the legal position?
Firstly, as a general rule business to business contracts can be concluded verbally. As such, in principle, if you did agree to the advert over the telephone, you would be bound by the contract and liable to pay for it. In a business to business contract, unless it is otherwise agreed, you do not have any ‘cooling off period’ or right to cancel the contract.
Although it’s difficult to say if a business that calls you is legitimate or not, there are known various scams in operation, with people calling businesses purporting to be selling advertising over the telephone. You should generally always be very wary, and take steps to satisfy yourself as to who you are dealing with before agreeing to anything.
If you are accused of having entered into a contract, but do not believe you have, you need to ask yourself and anyone else that you employ whether they may have agreed to such a contract. If you do not feel that you did, then you should put the other party to proof as to what evidence they have of the contract. For example, if they have a recording of the conversations, ask to hear it.
If they do not satisfy you that you did agree, then it is your prerogative not to pay them, but, of course, the risk is that they will take you to court. They would need to convince the court, on the balance of probabilities, that you did enter into the contract. For a contract to exist, there needs to be an offer, acceptance of that offer, consideration (the concept of an exchange of obligations) and an intention to create legal relations. If, for
example, you did not say yes, but merely said “I will think about it”, you can argue that there was no acceptance, and no intention to create legal relations at that stage, so no contract was formed.
If you feel that they have not performed the contract, or have made a misrepresentation (e.g. lied about having a connection to a charity) then you need to raise this with them, as both non-performance and
misrepresentation would be arguments you can raise in your defence if the matter proceeds to court. The PDA Member Legal Helpline deals with similar matters daily. If you need any advice, please give them a call.
Helpline 0345 313 4141
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July 25, 2017 | Share: