Dispute Of An Automatic Renewal Clause

1024 words - 5 pages

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 ...view middle of the document...

An automatic renewal clause, in my opinion, is a legal avenue of forcing people to continue doing business with their company after their initial lease ends. It is unethical to make someone continue to partake of services they no longer want. The salesman was probably hoping she didn’t notice the fine print on the back of the page with the intention of locking her in to be a long term customer, whether she wanted to or not. This goes against all moral and ethical boundaries of society. Yet, it is a common practice.

The Uniform Commercial Code would apply in this case. In § 2A-108 it states that if a court believes any part of a contract to be unconscionable at the time it was written it will refuse to enforce the contract (UCC 2A, 2012). With the new law concerning how a lessee is informed of the clause and UCC Article 2A I feel that it was unconscionable because regardless of whether he told her or not, the clause was not clearly stated on the contract. I think that in this case the courts would not enforce the fifteen year automatic renewal clause. If the contract was clear and the salesman had required initials on the each of the terms of the contract and the signatures were at the true end of the contract it would be completely enforceable. But because the contract was not drawn up that way the courts will not force her to continue the lease and according to 2A paragraph 4 the court will award reasonable attorney’s fees to Letisha.

Before doing business with someone, looking for a doctor or even someone to change my oil, I always do the research. I check the Better Business Bureau first. Then I do a general search on the company. There are multiple other ways to make and find complaints. Complaints can be filed with the Federal Trade Commission though I don’t believe the public can see those complaints. There are multiple online complaint forums including RipoffReport.com. An article on...

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