Burned by lack of cooling off period
Small businesses need same protection as consumers
Just one day after signing a contract to put his secondhand car dealership on the market, 75-year-old Joe Bruce tried to cancel.
He had signed a deal with business transfer agents RTA (Business Consultants) Ltd and the next morning a relative warned him about adverse online stories about this outfit – many written by me.
But far from agreeing to cancel, RTA sued Joe for breach of contract and he now faces bankruptcy after being ordered to pay almost £7,000.
Because the law classes this as a business deal – even though Joe was personally sued rather than his company – he could not ask for a cooling off period that would have protected a consumer.
He told Colchester County Court last week that he signed the contract after RTA’s sales agent said his company could fetch £140,000.
“That was the figure he put to me,” said Joe, who was on strong painkillers following an operation.
“I said at the time: ‘OK, if that’s what you think it is worth’.
“All I wanted to do was get that guy out of the office.
“I was in no fit state to sit there and go through an agreement which had a lot of small print. I feel I was pushed into it, I really do.”
Joe said he would never have valued the garage so highly, it only had two years left on its lease and had been running at a loss.
It did not even own the stock of old cars on the forecourt, which belonged to other dealers and from which Joe took a cut if any of them were sold.
The RTA rep, Simon Lowry, told the court that he could not remember who came up with the valuation figure and admitted never checking the garage’s accounts or going through every clause in the contract with Joe. But he insisted: “I never bamboozle anybody.” RTA’s lawyer Thomas Weatherill said the contract was to market the business for a year and that “you cannot give notice within that 12-month period”. Or even, it would seem, within 24 hours. RTA’s fixed fee on the sale was to be £10,000 plus VAT, with two initial payments of £400 plus VAT to register the business as for sale. It sued for £5,000 plus VAT for breaching a clause which has seven subclauses, including failing to pay the registration fee.
David Bunn, a relative of Joe, told the court: “I read the contract with Joe the day after he signed it and said ‘you must be mad signing it’.”
Deputy District Judge Rooney ruled in favour of RTA but I sense he took no pleasure in doing so, saying: “One could say that RTA makes a business of going round signing people up to these kind of contracts.”
Joe said outside court that the result left him sick, adding: “I wasn’t in a good place when I signed that contract and I feel that they took advantage of me.”
After the hearing, I heard from
‘I never bamboozle anybody’
RTA director Paul O’Reilly, who attacked what he called the “hopeless crusade” by myself and support group The Campaign for Ethics in Business Transfer Agents (CEBTA).
Hopeless? CEBTA says: “There are 53 cases won by people we have helped, with RTA’s claim being dismissed.
“These claims are usually ruled unconscionable because they’re exorbitant.
“However, it is only an informed customer who can successfully defend themselves and CEBTA gives free information to help people.”