Unfair contract terms costing small firms billions
New research from the Federation of Small Businesses (FSB) suggests half (52%) of small firms have been stung by unfair contract terms with suppliers, costing nearly £4 billion in the last three years.
Suppliers are failing to make auto-rollover clauses clear up front (24%), tying businesses into lengthy notice periods (22%), charging high early termination fees (20%) and concealing details in small print (20%).
Two in five (40%) respondents said they felt powerless to do anything about unfair contract terms because the supplier was too important or powerful to challenge.
Mike Cherry, FSB national chairman, comments: “We have identified persistent problems with suppliers, across sectors, treating small firms unfairly. This suggests the market is failing to deliver value for money products and services for small business customers.
“Small businesses don’t have the time, expertise or purchasing power to scour the market to find and negotiate the best deals. Small business owners behave in a similar ways to consumers, but they don’t have the same guarantees of quality or legal redress in an unfair situation.”