Yes, a business energy contract agreed over the phone is normally binding. Ofgem says plainly: "your verbal agreement is binding", and there's no cooling-off period. But the seller must explain the main terms before you agree, and a microbusiness must get them in writing within one working day.
That makes the phone call itself the moment that matters. This guide covers what the rules require, what to check in the paperwork, and what you can do if a call didn't go the way the contract now says.
This is general information, not legal or financial advice. Rules are as of 2 October 2026.
Is a contract agreed on the phone really binding?
Yes. Ofgem's guidance for microbusinesses says: "Yes, your verbal agreement is binding." Many business energy contracts are agreed this way, often on a recorded line.
There's also no automatic right to change your mind afterwards. Ofgem states: "There is no cooling-off period after you agree the contract (even when this agreement is made over the telephone rather than in writing)."
Ofgem looked at adding a cooling-off period for microbusinesses in its 2022 review. It decided "not to proceed with implementing a cooling-off period at this time", and said it would revisit the idea later. As of October 2026, there is still no general cooling-off period for business energy.
Do these protections apply to my business?
Most of the specific rules below protect microbusinesses. Ofgem counts you as a microbusiness if you meet any one of these:
- fewer than 10 employees (or full-time equivalent) and an annual turnover or balance sheet of no more than €2 million (Ofgem's guidance gives this as £2 million)
- you use no more than 100,000 kWh of electricity a year
- you use no more than 293,000 kWh of gas a year
Since 2024 some protections also cover small businesses: fewer than 50 employees and a turnover of up to £6.5 million or balance sheet of up to £5 million, or use of up to 200,000 kWh of electricity or 500,000 kWh of gas a year. The Energy Ombudsman says that between them these definitions cover as much as 99% of businesses in Great Britain.
Your annual kWh is on your bill. If you're near a threshold, use the figure for each fuel separately.
What must the seller tell me before I agree?
The supplier or broker must "clearly explain the Principal Terms of the contract to the consumer before a contract is entered into". Principal terms are the main points of the deal, such as:
- the unit rates and standing charges
- the contract length and end date
- how and when you can leave, and any exit fees
- how the broker is paid
Ofgem specifically said that just sending you an email or text during the call does not count as explaining the terms. They have to be brought to your attention, not just made available.
Brokers must also tell you "how the customer will pay (directly or indirectly)" for their service. That might be a flat fee, or a commission added to your unit rate that you pay through your bills.
What should I receive in writing afterwards?
For microbusinesses, the written principal terms must arrive "no later than one working day after the Micro Business Consumer Contract is entered into". That's been the rule since 1 October 2022.
Two other rules affect what that paperwork shows:
- Broker costs in pounds. For microbusinesses, broker costs must appear in the principal terms "as a total cost in pounds/pence covering the duration of the contract" (from 1 October 2022).
- Broker fees for all businesses. From 1 October 2024, broker fees must be clearly shown in the principal terms for all non-domestic customers, not just microbusinesses.
If the written terms don't match what you were told on the call, act quickly. The written document is your best evidence, and the call recording is the seller's.
What can go wrong on a sales call?
The common problems aren't dramatic. They're usually small things that add up:
- A rate you didn't hear clearly, or a rate quoted per kWh without the standing charge.
- A start date that isn't now. A contract may be agreed today to start when your current one ends, sometimes many months away.
- A "confirmation" call that's actually the contract. A short recorded script asking you to say "yes" to a list of points is often the moment of agreement.
- Commission you weren't told about, built into the unit rate.
- Agreeing for a site you're about to leave. Check the terms on moving premises before you say yes.
None of these mean you were mis-sold. But each is worth checking against the written terms.
Can I get out of a contract I agreed by phone?
There's no automatic right to cancel. Your options depend on what happened:
- Ask the supplier or broker. Ask quickly, ideally before the supply starts. They don't have to agree, but asking costs nothing.
- Ask for the call recording. If you believe the terms weren't explained, or differ from the paperwork, the recording shows what was said.
- Complain in writing. Citizens Advice says "it's a good idea to complain in writing so you can keep a record". Set out what you were told, what the paperwork says and what you want done.
- Go to the Energy Ombudsman. If 8 weeks pass without a fix, or you get a "deadlock letter", you can take it to the Energy Ombudsman. This applies to brokers too, if they're registered.
Since December 2024, suppliers may only work with brokers who are members of a redress scheme, so a broker selling to small businesses should have a route for complaints.
You can also call the Citizens Advice consumer helpline, which Ofgem lists as 0808 223 1133.
How do I protect myself on the next call?
- Ask for the full quote in writing before you agree anything: unit rates, standing charges, length, start and end dates and total broker fee.
- Don't agree on the first call. Ask for time to read the written quote.
- Ask directly: "Is this call the contract?" and "Is this call recorded?"
- Compare the quote with a fair price for your usage using our free estimator and our guide to business electricity prices.
- If you're told a price is only available "today", treat that as a reason to slow down.
What to do next
- Check whether you're a microbusiness or small business using your annual kWh and staff numbers.
- If you've agreed a contract by phone, find the written principal terms. Microbusinesses should get them within one working day.
- Check the rates, standing charges, start and end dates and total broker fee match what you were told.
- If anything doesn't match, ask for the call recording and complain in writing straight away.
- After 8 weeks, or a deadlock letter, take it to the Energy Ombudsman.
- Before your next renewal, get every quote in writing and check it with the estimator.
- Read our guide to your business energy bill so you can spot the charges on your first bill.