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TexLaw
TexLaw, Attorney
Category: Legal
Satisfied Customers: 4081
Experience:  Lead trial/International commercial attorney licensed 11 yrs
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Is a "contract rollover" legal in Utah if they signed a contract

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Is a "contract rollover" legal in Utah if they signed a contract that said it in the contract in small print? It's for a uniform program like CINTAS, and it rolled over after the 5 year contract was up without any notice. Thanks
Submitted: 1 year ago.
Category: Legal
Expert:  TexLaw replied 1 year ago.
Hi,

Just so I'm clear on the facts, can you further explain who you are in terms of this contract? Are you a business owner and the other party is a service provider?
Customer: replied 1 year ago.
Yes. I am a mechanic who has a service provider called g&k that does textile services for my company, and their contract automatically rolled over, with no notification. Even though it was in small print in the contract I feel it is wrong
Expert:  TexLaw replied 1 year ago.
Thanks for your response.

In Utah, the law states that automatic renewal clauses in contracts are legal unless they are in connection with consumer service contracts. They are allowable in consumer service contracts where there is a notice provision.

Unfortunately, because this is a contract between two businesses, you do not qualify as a consumer under this law, and thus there are no restrictions on the automatic renewal provision. The law places a higher burden on business contracts than on consumer contracts, and assumes that the business owner is savvy and reads the contract thoroughly, even the small print. Thus, this burden under the law will prevent you from arguing that the contract was misleading and you will be bound by the automatic renewal clause.

I'm sorry this is not better news.
Customer: replied 1 year ago.
What makes a contract a consumer contract?
Expert:  TexLaw replied 1 year ago.
The applicable law here is Utah Statute 15-10-101 et seq. It is called the Services Contract Act.

A consumer contract is between a service provider and a "person", as stated in the law. The statute has a specific section for business consumers, which is where your case falls.

Under that section, there must be notice and the provision must be in bold on the contract only if the contract was signed after July 1, 2011.

Here, your contract was signed five years ago, which takes it out from under the operation of the Services Contract Act.
Customer: replied 1 year ago.
So after 2011, even for businesses, they have to have the writing in bold AND a notice?
Expert:  TexLaw replied 1 year ago.
Yes. The Act states the following:

(2) (a) For a service contract executed on or after July 1, 2011, that exceeds 12 months for a renewal period, a seller shall provide written notice of an automatic renewal provision prominently displayed on the first page of the service contract.

(b) In addition to complying with Subsection (2)(a), a seller shall provide written notice required under Subsection (1) to the consumer:

(i) personally;

(ii) by certified mail; or

(iii) prominently displayed on the first page of a monthly statement.

(c) (i) A seller shall provide written notice under Subsection (2)(b):

(A) no later than 30 calendar days before the last day on which the consumer may give notice of the consumer's intention to terminate the service contract; and

(B) no sooner than 90 calendar days before the last day on which the consumer may give notice of the consumer's intention to terminate the service contract.

(ii) A seller may not provide written notice required under Subsection (1) except:

(A) as provided in Subsection (2)(a); or

(B) during the time period described in Subsection (2)(c)(i).

(d) Written notice required under Subsection (1) shall be:

(i) written in clear and understandable language; and

(ii) printed in an easy-to-read type size and style.
TexLaw, Attorney
Category: Legal
Satisfied Customers: 4081
Experience: Lead trial/International commercial attorney licensed 11 yrs
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