Business Law and Corporate Ethics M2A2

Business Law and Corporate Ethics M2A2

Argosy University

Stacy Schaefer

08/17/2016

Business Law and Corporate Ethics M2A2

In the case of being sued for breach of contract, Letisha could always argue that she was never made aware of the automatic renewal clause. As of August 2015, sixteen states had Automatic Renewal Laws. The laws vary from state to state but they all require that automatic renewal clauses be brought to the attention of the consumer prior to the acceptance of an agreement. When the salesman did not make the renewal clause known to Letisha, he violated the terms of the Automatic Renewal Law, assuming of course that there was such a law in the state where Letisha lives. This law was also violated in terms of the fact that the notation referring to the clause was printed on the reverse side of the contract and therefore was not clearly and obviously stated.

In some states, such as California, it is even required to get consent regarding the renewal clause before proceeding with a contract. “This applies to all residents of California regardless of where the business is located” (Brooks, 2015). Not only do some states have laws pertaining to automatic renewal laws similar to California, but the “Federal Trade Commission Act, 15 U.S.C. Section 41, et, seq. also requires that stores make their automatic renewal policies clearly known to the customer” (Brooks, 2015).

Sudson could argue that, the terms of the renewal clause were in print on the contract and therefore Letisha did have written knowledge of the clause. It is not fault or responsibility of Sudson that Letisha did not read the whole contract prior to signing it. Sudson can argue that while they did not intend to deceive Letisha, they cannot be held responsible for her lack of judgement when entering into the contract. They can also argue that Letisha knowingly and willingly entered into the contract with them and has to date not suffered any from the contract. Letisha...