A deemed contract applies when any type of customer moves into new premises and starts to consume gas, electricity, or both, without agreeing a contract with a supplier. The customer here is ‘deemed’ to be supplied by the previous tenant’s or owner’s energy provider.
As the supplier needs to invoice the customer for the energy being used, the customer will be charged on a deemed rate until a signed contract is in place, or until the customer agree a contract with another supplier. Deemed contract may also exist if the customers are ‘out of contract’, i.e. the existing contract comes to an end but the customer continues to consume energy.
This possibility could arise in two ways:
1.If a contract is terminated either by the supplier or the customer, but the supplier continues to supply the customer, there is likely to be a deemed contract if:
a)The original contract does not express what will happen after termination. For instance, if it does not say that the original contract terms must apply when you are ‘out of contract’.
b)The current customer continues to consume gas, electricity, or both at the premises.
2.Where a contract expires but the customer is still consuming gas, electricity, or both from the same supplier, a deemed contract is likely to exist if:
a)The original contract does not express what will happen after expiry, i.e. it does not contain renewal provisions or state that the original terms still apply.
b)The current customer has told the supplier that they don’t want the original contract to continue.
Around 10% of the micro-businesses are on deemed contracts. It is quite necessary that they are aware that prices on these contracts are on average 80% more than rates charged in a negotiated contract. In case you are on a deemed contract, it is advisable for you to shop around and compare the offers by the suppliers for a new energy contract, as you could make considerable savings.
When you are on a deemed contract, you have certain rights. These are as follows:
1.If you start taking supply on a deemed contract, your supplier must:
a)Take all reasonable steps to provide you with the principal terms of the deemed contract including the charges or fees
b)Provide you with a copy of the complete contract if you ask for it
c)Take all reasonable steps in order to tell you about other available contracts and also about how you can get information on these
d)Take all reasonable steps to ensure that the terms of its deemed contract are not overly arduous.
1.If you are a business customer using energy on a deemed contract, the supplier cannot:
a)Prevent you from switching to another supplier, for any reason or at any time, i.e. they cannot object to you transferring for reasons of debt or contract.
b)Require you to give notice before terminating the contract or charge you a termination fee.
For any further information, you can call on Npower Contact Number and get in touch with its dedicated team.