Merchant Agreement & Service Contracts

For the most part, all auto-renewal contracts are similar—at least when it comes to the auto-renewal provision. It does not matter whether the contract is for a magazine subscription; gym membership; or satellite radio, the auto-renewal provision, and contracts in general for some of the below tactics, have the same weakness that can be used by the consumer to the consumer’s advantage.
Your first option may be to politely ask to void the contract. The business may allow this if you agree to pay a fee to walk away. This may seem like a long shot, but businesses need the favor of customers for their business to grow. It may be just enough to have you sing their praises about your exceptional business experience to allow the merchant to relax its contractual position.

If being polite does not work then start reading the contract carefully to determine if the merchant has breached or not adhered to the contract some way. Furthermore, look into the state law where the contract is from for state statutes on auto-renewal contract provisions and the required consumer protection clauses to see if your specific contract abides by them. To find the state your contract applies to, look within the contract’s specific provisions for the “governing law” or “choice of law” clauses, which will define a specific state law to use for the contract. If you cannot find any statutes that speak to auto-renewal provisions, try calling the state’s attorney general’s office to see if they can help or point you in the right direction. On the chance that you are able to find specific language in the contract that does not conform to state law, you can write a letter to the merchant explaining what you have found, and that you would like the contract nullified. This letter will most likely rid you of any further contractual obligations.

Your last option is to read the provision within the contract regarding cancellation of the contract. Inside of this provision, you should find instructions on how to cancel the auto-renewal function. The reason this is your last option is because it could force you to wait for an amount of time until the next cycle comes along where you have the right to cancel the contract. To cancel the contract, normally, you are required to write a formal letter to the merchant explaining your desire to cancel the contract going forward.

For contracts with a set period of time, asking politely to be relieved of the contractual obligation should still be in your arsenal. The main difference between an auto-renewal contract and a contract for a specific time is the non-availability of canceling the contract using the canceling instructions in the previous paragraph. In the case of these types of specific term contracts look for provisions that require payment for the remainder of the contract regardless of when the contract is cancelled. These provisions are normally thought to overburden the consumer with little to no obligation on behalf of the merchant, resulting in penalties. Additionally, similar to auto-renewal contracts, you should check with the contracting state’s consumer protection statutes to make sure the contract adheres to the statutes—often these statutes must be stated verbatim in the contract which allows for the likelihood that some form of non-conforming language can be found.

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2016-04-02T03:17:59+00:00 October 30th, 2013|Blogs|