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Michael Holly
Michael Holly, Solicitor
Category: UK Law
Satisfied Customers: 6355
Experience:  I have 20 years of experience as a solicitor in litigation and other areas
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Are rolling contracts enforceable?

Resolved Question:

Are rolling contracts enforceable?

Submitted: 4 years ago.
Category: UK Law
Expert:  Michael Holly replied 4 years ago.

A rolling contract can be enforceable. As long as it is capable of being terminated it will not fall foul of the rule of perpetuity which says that a contract cannot be legally binding forever and must be capable of being terminated.

Best wishes

Customer: replied 4 years ago.
Is it likely that a court would enforce a contract if it has been running for three years and the company does not send renewal notices? The company that I have been using did not mention that it was a running contract when we signed up and have not sent us any renewal letters. I had a similar problem with British Gas (who claimed that they had sent renewal letters and made it very difficult to end the contract) The company in question has repeatedly raised its prices so we are now paying more than twice as much as the going rate?
Expert:  Michael Holly replied 4 years ago.

There is much debate in the law about rolling contracts at the moment. As a lawyer they seem unfair to me and there has been debate about whether they can be said to be unfair under the Unfair Contract Terms Act or fall foul of a legal rule that a person must positively enter into a contract rather than be bound because they fail to do something like say stop after one year.

As yet there is no strong case supporting either argument and the additional difficulty you have is that the bottom line is you used the gas so a court would expect you to pay for it

Customer: replied 4 years ago.

I think you may have misunderstood. The contract I am having difficulty with is with the environmental company Veolia. I am quite willing to pay them for the usage of the bin up to date but I don't want it anymore.

They say that the contract has to be cancelled three months before its yearly anniversary (I have had the bin for three years and the anniversary is in October). I was not aware that it was a rolling contract and thought that I would just have to give notice. They are saying that as it is October, I am stuck with it for another year. They do not send any reminders of the anniversary date and argued that I should have read the contract. Well I did three years ago when I started the business but do not make a habit of reading through the contracts each year (perhaps I should?).

Can they do this and am I stuck with a company that has very poor service, is far more expensive (as they keep putting the prices up) and were clearly intent on ripping me off by putting the rolling contract in the small print?

Sorry this is taking so long, but I do appreciate your help with this.

Expert:  Michael Holly replied 4 years ago.

You should argue that requiring you to give 3 months notice during a particular month is not reasonable and that it constitutes an Unfair Contract term. They have the choice of accepting 3 months notice now or you will challenge the clause in court. Should they lose then obviously that will affect all the contracts they have with customers and could be potentially disastrous for them so hope fully they will agree to simply accept the 3 months now. You can also argue that they are in breach of contract because under the Goods and Services Act a service supplied must be of a reasonable standard . If they have failed to do this then they are in breach of contract and the 3 month term would not apply anyway. I would use this argument first.

Michael Holly, Solicitor
Category: UK Law
Satisfied Customers: 6355
Experience: I have 20 years of experience as a solicitor in litigation and other areas
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