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Nicola-mod, Moderator
Category: Law
Satisfied Customers: 21
Experience:  Moderator
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We have a service contract that expired at the end of May.

Customer Question

We have a service contract that expired at the end of May. We then received an invocie for the next 12 months and I tild them we no longer require the service as we are changing computer systems. It appears the contract says it auto-renews unless you give 3 months notice that must expire at the end of the contract. We have had no reminder about renewing. They are trying to enforce the contract, is this legal?
Submitted: 4 years ago.
Category: Law
Expert:  Jo C. replied 4 years ago.

Thank you for your question . My name is Jo and I will try to help with this.

In order to give you an answer tailored to your circumstances, I will just need to ask you some preliminary questions so that I can consider your position from all angles.

Does the contract say it rolls over?
Customer: replied 4 years ago.

Yes it says it rolls over. You have to give 3 months notice before the renewal date to cancel. Is that legal as business and circumstances change. We will be getting nothing from this contract. We also had no reminder.

Expert:  Jo C. replied 4 years ago.
Thanks for the information.

I am sorry but I can't give you any good news. Rolling contracts are lawful. They have been criticised by the OFT in relation to some rolling contracts but those are mostly consumer deals such as insurance and the like. In any event, OFT criticism does not amount to a law against it I'm afraid.

Even the OFT criticism just demands that companies remind customers rather than phase out rolling periods and unfortunately its a different type of contract.

You could always try to challenge it by pointing to the OFT criticism and the unfair terms and contracts act but it would be irresponsible of me to tell you that there is a strong chance if they sue. There is actually a better chance of them not suing as its not worth the manpower.

If they do sue though they do only have a claim against you in lost profits rather than the total sum of the contract. The amount they can claim from you is not likely to be anything like the sum of the contract.

I'm very sorry but I have to give you truthful information.

Can I clarify anything for you?

Expert:  Nicola-mod replied 4 years ago.

Just a quick reminder, there is an unrated answer waiting for you here from the Professional.

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Thank you,