Agreement Will Be Automatically Renewed
However, as soon as a service contract is automatically renewed, all is not lost. Depending on the circumstances surrounding the entry into the service contract, there may be remedies which, under customary law, could result in a separate right to terminate the service contract. Companies should pay attention to the conclusion of contracts containing automatic extension clauses, as an unlawful termination of the contract for an extended period could give rise to a claim for damages for infringement. If passed, the protection of unfair contract terms will allow small businesses to take enforcement action on “unfair” terms contained in model contracts, and it seems likely that this protection will extend to automatic renewal terms. These amendments are expected to enter into force in early 2016. The applicability of the law does not apply to “business to business” or “banks, trust companies, savings and loan associations, savings banks or credit unions” contracts that are authorized or organized in accordance with the laws of a state or the United States, or to a foreign bank that owns a branch or agency that is authorized or organized in accordance with the laws of a state of the United States. or a subsidiary or related enterprise thereof.  The parties may also enter into negotiations to vary the service contract for the remainder of the extended term. The renewal clause of a contract is such an important clause to read and understand. I can`t tell you how many times I`ve been called when a client found out that a contract they had signed (and then forgotten) had been extended for an additional period of time. This happened either because they did not respect the extension clause, because they completely forget the contract, or because they did not take into account the dates of the contract. The parties may renegotiate or amend the legal agreement….