Business Energy Glossary
What is the cooling-off period on a business energy contract?
The cooling-off period is a defined window after signing a UK business energy contract during which a micro-business customer can cancel the contract without penalty. The standard period is 14 days from the date of contract signing for contracts entered into off-premises (online, by phone, or through a broker visit). The right is enshrined in Ofgem rules and the Consumer Contracts Regulations. Larger business customers do not have a statutory cooling-off period and are bound from the moment the contract is signed unless the supplier offers a discretionary cancellation window.
The cooling-off period exists primarily to protect micro-business customers from pressured sales practices. The period gives the customer time to review the contract terms, compare against alternatives, and withdraw if necessary. Understanding the scope and the limitations of the cooling-off right is essential for any business signing a new energy contract.
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Who has cooling-off rights
The 14-day cooling-off period applies to:
- Micro-business customers (under 100,000 kWh electricity, 293,000 kWh gas, or fewer than 10 employees with turnover below £2 million).
- Contracts entered into off-premises (online, by phone, or with a broker representative visiting the customer site).
- Both new contracts and renewals signed off-premises.
The right does not apply to contracts signed at the supplier premises (which is rare in practice) or to larger business customers who do not qualify as micro-business.
Length of the period
The standard period is 14 days from the date of contract signing. The 14 days are calendar days, not business days.
If the supplier has not provided the required pre-contract information (the contract terms, the rates, the cooling-off rights notification, the cancellation form), the period can extend up to 12 months from the date of signing. In practice this rarely applies because most suppliers provide compliant information.
How to cancel during cooling-off
The cancellation can be made by:
- Written notice to the supplier. Email, letter, or via the supplier online cancellation portal. The communication should state the contract reference and confirm the customer wish to cancel.
- Use of the supplier-provided cancellation form. Suppliers are required to provide a cancellation form alongside the contract.
The notice must be sent within the 14-day period. The date the notice is sent (not received) determines whether it falls within the window.
Consequences of cancelling
When the cooling-off right is exercised:
- The contract is cancelled with no liability for future supply.
- The customer is liable for any energy already supplied at the supplier rate (effectively the customer pays for what they have used).
- The supply continues on the previous arrangement (existing contract, deemed rates, or out-of-contract) until a new contract is signed.
- The supplier cannot charge an exit fee or termination charge.
If the contract had not yet started (signed for a future start date), cancellation prevents the contract from starting. If the contract was already in force, cancellation ends it from the date the notice is received.
Limitations of the right
Three notable limitations:
- Not available to larger customers. Only micro-businesses qualify under the statutory scheme.
- Applies to off-premises contracts only. Contracts signed at the supplier premises are excluded. In practice most business energy contracts are off-premises so this rarely matters.
- Time-limited. Standard 14 days. Cancellation outside the window requires supplier discretion or grounds for unwinding the contract (mis-selling, misrepresentation).
Larger business customers
Customers above the micro-business threshold do not have a statutory cooling-off period. They are bound from the moment the contract is signed unless:
- The supplier offers a discretionary cancellation window in the contract terms.
- There are grounds to challenge the contract (mis-selling, misrepresentation, failure to follow proper sales procedure).
- The supplier and customer agree to cancel by mutual consent.
Larger business customers should review contracts carefully before signing because the standard right to cancel does not apply. Where doubt exists about the contract terms, taking time to review (or seeking specialist advice) before signing is more important than for micro-businesses.
the cooling-off period on a business energy contract FAQs
What is the cooling-off period on a business energy contract?
A 14-day window after signing during which a micro-business customer can cancel a UK business energy contract without penalty, where the contract was entered into off-premises.
Who qualifies for the cooling-off period?
Micro-business customers (under 100,000 kWh electricity, 293,000 kWh gas, or fewer than 10 employees with turnover below £2 million) on contracts signed off-premises.
How long is the cooling-off period?
14 calendar days from the date of contract signing. The period can extend up to 12 months if the supplier has not provided required pre-contract information, though this rarely applies in practice.
How do I cancel within the cooling-off period?
Send written notice to the supplier (email, letter, or online portal) or use the supplier-provided cancellation form. The notice must be sent within 14 days of signing.
Do I pay for energy used during the cooling-off period?
Yes. If energy was supplied during the period, the customer pays for it at the supplier rate. Cancellation prevents future obligation under the contract but does not refund energy already used.
Can larger businesses use the cooling-off period?
No. The statutory cooling-off right applies only to micro-business customers. Larger businesses are bound from signing unless the supplier offers a discretionary cancellation window.
What if the supplier did not tell me about the cooling-off period?
Failure to provide proper pre-contract information including cooling-off rights extends the cancellation period up to 12 months from signing. The customer can cancel under the extended period without penalty.
Does cooling-off apply to renewals?
Yes, for micro-business contracts signed off-premises, including renewals. The 14-day window applies from the date the renewal is signed.