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UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 4312
Experience:  English solicitor with over 12 years experience
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Can a supplier (not a gas or electricity supplier) automatically

Customer Question

Can a supplier (not a gas or electricity supplier) automatically roll over a contract every three years?

An employee signed an agreement back in April 2006 that says:

This agreement commences on the date that the Customer signs below. The agreement is subject to the FMP Europe Terms of Business which are included on our invoicing. Service delivery commences on the production of the first pay calculation and shall continue for the minimum contract period of 36 months and afterwards at which point the contract will need to be re-signed or otherwise agreed. Time will not be of the essence in achieving the target live date. Termination charges will apply should this agreement end before the contract end date.

Unfortunately, that employee is no longer with the company and we don’t have a signed copy of the agreement so we were not aware of the automatic roll over, we thought it was month by month.

We have asked for a copy of the signed contact, but the supplier has advised it is in achieve and they will charge us to obtain a copy – can they charge us for a copy of the signed contract?

When we terminated the contact, well, we didn’t even officially terminate it – they simply invoiced us for 12 months when we changed from Spanish payroll to Germany payroll set.

We have disputed this fee but the supplier has advised:

"continuation of the service is implied agreement", therefore Etherstack is bound by FMP's terms and a termination fee is payable.

We’d like to know:

Can they automatically roll over this agreement dated April 2006 and lock us in for a further three years on the anniversary date, without contacting us first?
Can they charge us for a copy of the signed agreement?
Are we legally bound to pay the 12 months fee charged for terminating the contract?

Thanks in advance for your time and help.
Submitted: 2 years ago.
Category: Law
Expert:  UKSolicitorJA replied 2 years ago.

To answer yoyur queries:

1) No, the agreement dated April 2006 cannot be automatically extended. The wording "and afterwards at which point the contract will need to be re-signed or otherwise agreed".

If the contract was not re-signed or otherwise agreed, it does not automatically roll on. The wording is ambigous and any doubt should be interpreted in your favour. So, there is a good ground in your favour that the contract does not get renewed every 3 years The only fixed period is the initial 3 years.

2) no, unless a charge is mutually agreed. They may charge a 10 pound fee under the Data Protection Act if a subject access request (SAR) has been made but your query is not a SAR.

3) Termination charges are only applicable if the contract was terminated before the contract end date (initial 3 year term). You may argue that this date has long passed and no termination charges should apply.

You appear to have a good claim against the supplier.

Hope this helps
Customer: replied 2 years ago.

Great, thank you.


I have argued this point with them over a number of emails but they are still adamant that we must pay the 12 month termination fee and they have also stop providing services (for our Germany payroll, until we pay this).


Is there any link anywhere or something I can point them to so they understand they have no legal grounds to charge us this?


I need to keep arguing this point with them but not sure what else I can say in an email to make them understand.


And if they stop providing services, due to none payment (according to them), will we be held to responsible for payment of the Germany payroll cost?

Expert:  UKSolicitorJA replied 2 years ago.
There is no link I am afraid, it is a simple contractual interpretation matter and the issue may only be determined conclusively by the courts.

I am afraid I do not know what has been agreed re: German payroll cost but if they will not provide that service, you may treat them as repudiating the contract, stop paying them for that service and appoint another supplier.

All the best

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