A family member had enter into an agreement in February 2012 for a service which had a fixed term duration of 3 years of which he had paid all in advance. At the end of the contract period (February 2015), he had inform the company via phone call that he would not like to continue with their service.
However, in June 2018 (more than 3 years after the contract end period) he received a notice for payment amounting to 3 years service fees. The company mentioned that there is a clause in the agreement that he signed in 2012 that the contract is renewable on a yearly basis.
He was never informed of any due payment from 2015 till the notice letter in June 2018.
Is there such a thing as a perpetual contract? Even so, is it legal for the company to wait for more than 3 years before billing him? In the contract it actually said that the client have to make payment in advance first for the service. So if there is no payment made, can the company still renew the contract term?
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Perpetual Commercial Contract
175 Views ⚫ Asked 9 Months Ago
edited on Oct 16, 2018 at 01:20
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3 Answers
answered on Sep 26, 2018 at 07:05
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vkpc
What kind of service is it?
The company mentioned that there is a clause in the agreement that he signed in 2012 that the contract is renewable on a yearly basis.
Depends on the agreement wording which may state who has the option to renew.
The company mentioned that there is a clause in the agreement that he signed in 2012 that the contract is renewable on a yearly basis.
Depends on the agreement wording which may state who has the option to renew.
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answered on May 15, 2019 at 17:28
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YSYS
edited May 27, 2019 at 01:36
It is highly dependent on the terms on renew i.e.
(1) whether it is automatic / by agreement?
(2) what is the duration of the renewed term?
(3) payment for the renewed term meaning whether it's also a lump sum payment for a 3 year period that's why they are billing in 2018?
Best to refer back to the terms of the contract. In any event, it would be prudent to notify them in writing that you no longer wish to engage their services.
(1) whether it is automatic / by agreement?
(2) what is the duration of the renewed term?
(3) payment for the renewed term meaning whether it's also a lump sum payment for a 3 year period that's why they are billing in 2018?
Best to refer back to the terms of the contract. In any event, it would be prudent to notify them in writing that you no longer wish to engage their services.
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edited May 27, 2019 at 01:38
1. Whether the payment is on yearly basis and the payment should be made in advance before they commenced the service?
2. Whether you noticed the services provided for the past 3 years?
3. Whether the agreement states that they need to inform you when they provide the services?
4. From the above points, you will have the arguments that you are not bound by the invincible contract.
*Please visit our legal articles: www.kuekong.com
2. Whether you noticed the services provided for the past 3 years?
3. Whether the agreement states that they need to inform you when they provide the services?
4. From the above points, you will have the arguments that you are not bound by the invincible contract.
*Please visit our legal articles: www.kuekong.com
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