Terminating a service contract for an extended period of time can be both difficult and costly. The automatic renewal clause becomes an economically viable option in the event of a renewal of the contract. In the case of companies that enter into contracts for a period of time, termination of the contract is the most optimal decision that the reasonable consumer will probably make, since the contract itself would no longer exist at no cost. However, companies considering several periods between them and, since contractual terms would apply for all periods, may find that with each termination of the contract, they will have to bear costs to renew the contract. In this situation, companies may therefore find that the automatic renewal clause is the best solution, since contract renewals must not inc afford costs for each period, except for one to terminate the clause. [1] Suppose you own a business. You bought some computer software last year, which you hoped would improve productivity, but now realize that your business no longer uses or needs it. Therefore, you decide to terminate your license agreement with the Kreditor. However, if you call your seller, you indicate that your licensing agreement with them does not allow you to simply cancel and, making things worse, informs you that you are contractually obliged to continue paying the software for an additional year. Or are they? Apparently, many ace service providers and their customers are unknown, both national and federal law limit automatic extension clauses, particularly in the consumer context. Florida`s Statute No. 501.165 requires that the automatic extension provisions in service contracts be clear and striking and that the consumer be notified at least 30 days or more than 60 days before the automatic renewal of the contract if the original contract is 12 months or more and if it is automatically extended by more than one month.

Companies should be mindful of contracting with automatic renewal clauses, as an unlawful termination of the contract for an extended period of time could result in a claim for infringement. Automatic extensions can be useful to both consumers and businesses, avoiding any lack of performance, consistent billings, etc. But in advance and easy to manage is not only a good business practice that will improve the reputation of a company, but is also prescribed by law. As individuals and contractors, you can enter into contracts for various services such as waste management, laundry, landscaping, snow removal, maintenance, etc. Some of these contracts may include automatic renewal provisions, often buried in the fine print. When such a provision is available, the contract is automatically renewed for a different period, unless you give the seller an identical written termination for a certain period before the current period expires. While an automatic short-term contract renewal system may not be a problem, such provisions can have serious consequences for long-term contracts. B for example a year or more. If no standard is available or has appeared as part of this rental, you can purchase all (but not less than all) of the device at the end of the initial period or extension. At least 180 days, but no more than 270 days before the initial lease term, you must inform us in writing by authenticated mail that you are acquiring the device at the fair value that we will determine according to our appropriate assessment, or that you are returning the device to us. If you do not provide us with this written notification or if you do not purchase or deliver the equipment under the terms of the lease, this lease will be automatically renewed for an additional 12 months and 6 months thereafter until you provide the device to us.