AM Online

Law: Beware of ‘over the phone’ contracts

A recent High Court case (Bear Stearns Bank plc v Forum Global Equity Ltd) confirmed that a contract agreed over the phone is still a good contract and can be enforced.

The figures in this particular case were perhaps a little higher than usual (€2.9 million) but the principal still holds. What had happened was that the particular financial package being sold increased in value considerably due to unforeseen circumstances and the seller wanted to pull out of the deal.

Businesses should be extremely careful about phone deals whether it is from utility companies, mobile phone companies or other dealers. It is also important to make employees aware that they should not ever get involved in conversations with businesses seeking to sell. (This also applies to ‘door step’ sellers also).

We are dealing with one case at the moment relating to electricity sales and fortunately the client has a taped copy of the conversation. The promise was to significantly improve the prices for electricity usage but it hasn’t materialised. The lack of response received to date suggests the company are up to no good.

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