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Raeside Chisholm Solicitors

The directors of Raeside Chisholm are experienced solicitors who enjoy a deserved reputation in Glasgow and beyond for personal attention allied to a commitment to outstanding levels of quality legal services. For enquiries, please contact us on 0141 248 3456.
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Unfair Contract Terms are Costly for Small Businesses

Over half (52%) of small firms have been stung by unfair contract terms with suppliers, costing nearly £4 billion in the last three years, according to new research from the Federation of Small Businesses (FSB).

The types of unfair contract terms identified in the research include:

- Suppliers failing to make auto-rollover clauses clear up front (experienced by 24% of respondents),
- tying businesses into lengthy notice periods (22%),
- charging high early termination fees (20%) and,
- concealing details in small print (20%).

Around 40% of respondents said they felt powerless to do anything about unfair contract terms because the supplier was too important or powerful to challenge. This highlights that small firms can be just as vulnerable as consumers when buying goods and services, says the FSB, and they need better protections.

The research found that up to 2.8 million small firms have suffered because of unfair contract terms, with 75% of these being stung twice or more in the past three years.

One in ten (11%) small businesses affected by unfair terms were set back by more than £5,000 dealing with a single problem. Two in five (37%) lost more than £1,000 through an unfair agreement with a supplier.

“If small firms were better protected when entering a contract with a supplier, they would have more confidence and trust in the market,” commented Mike Cherry, FSB National Chairman. “Suppliers would be more accountable and businesses would spend less time and money dealing with the fallout. Tackling unfair contract terms would lead to a more efficient and competitive economy.”

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