Dispute of an Automatic Renewal Clause

March 20, 2013

Dispute of an Automatic Renewal Clause

In my experience, a contract negotiation involves more than price and length of service. It also includes any addendums or clauses and the lessee would initial by each to signify that they read and understood the terms of the agreement. The signatures of the lessee and lessor would be at the end of the contract. At no time during the negotiation did the representative from Sudson Washer and Dryer Service mention to Letisha that there was an Automatic Renewal Clause on the reverse side of the contract. They signed on the front page. Granted she should have turned the page over to look at it but she didn’t. And it is unlikely that she will be able to prove that he never mentioned it or that she herself was unaware of this specific clause.

If Letisha refuses to pay and Sudson brings suit against her for breach of contract she could possibly argue that it was an unconscionable contract being that the automatic renewal period was three times the initial rental period, however, that seems unlikely. A bill that was passed in July of 2010, states that “Consumers must now be clearly informed that unless they cancel the contract, it will automatically renew, and must further be informed how they can obtain related information (Berger, 2010).” The Sudson representative failed to make this clause clear to Letisha by not verbally informing her as well as putting it on the back of the page. While she can’t prove that he didn’t tell her about the clause she might be able to use the contract as proof that the clause was neither clear nor conspicuous on the contract.

Sudson could claim that he did inform Letisha about the clause and that she is feigning ignorance because she forgot to cancel it ninety days before the lease was up. And with Letisha being a landlord and more than likely has contracts with each of her tenants, the claim, however unethical, would be valid.

An automatic renewal...