Deemed contracts for gas and electricity supply
A ‘deemed contract’ is a contract where a customer takes a supply of electricity or gas or both in a manner otherwise than under a contract that has been expressly entered into with a supplier. A deemed contract may arise where a contract has ended without being formally renewed or where there are new occupiers who do not formally arrange a new supply contract. Deemed contracts for electricity and gas are governed by Schedule 4 paragraph 3 of the Utilities Act 2000, Schedule 6 of the Electricity Act 1989, Schedule 2B of the Gas Act 1986 and SLCs 7 and 23 and apply to situations where the supply of electricity and gas continues but the original contract is no longer in force. In such cases, you remain under an obligation to pay, and the supplier is expected to behave reasonably with respect to terms and conditions and charges. Suppliers are also under a duty to use ‘reasonable endeavours’ to inform you of the terms and act reasonably towards you and must not impose onerous terms.
A deemed contract continues until such time as a new contract is agreed between you and the supplier or you end the contract by leaving the premises. Schedule 6 paragraph 3(1) of the Electricity Act 1989 and Schedule 4 paragraph 3 of the Utilities Act 2000 also state:
‘Where an electricity supplier supplies electricity to any premises otherwise than in pursuance of a contract, the supplier shall be deemed to have contracted with the occupier (or the owner if the premises are unoccupied) for the supply of electricity as from the time…when he began to supply electricity.’