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I have a 5 year contract with Peninsula Business Services which

Customer Question
expires on 1st August 2016...
I have a 5 year contract with Peninsula Business Services which expires on 1st August 2016. I informed them today that I wish to cancel when the term is up but was told that I have to give them at least 6 months notice and that I'm on automatic rollover for another 5 years ! Surely this can't be legal ??
JA: The Lawyer will need to help you with this.
Customer: OK - I'll get back when I have found the original contract - which incidentally I was rushed into signing and thought I was signing for 3 years, On looking at it later I saw that it was a scribbled 5 years. I have paid £199 per month since then and thought once 5 years was up I would be done with it. An automatic roll-over cannot be valid afetr 5 years - who signs a contract that could potentially roll on to 10 years !
JA: OK. The Lawyer will need to help you with this. Anything else I can tell the Lawyer before I connect you two?
Customer: No thank you ...
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Submitted: 1 year ago.Category: UK Law
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Answered in 3 hours by:
4/6/2016
Solicitor: Ben Jones, UK Lawyer replied 1 year ago
Ben Jones
Ben Jones, UK Lawyer
Category: UK Law
Satisfied Customers: 48,484
Experience: Qualified Solicitor - Please start your question with 'For Ben Jones'
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Hello, my name is***** am a qualified lawyer and it is my pleasure to assist you with your question today. Does th contract specifically state that it rolls over after 5 years unless cancelled?
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Customer reply replied 1 year ago
Hi Ben
The contract says :
The contract shall be for the duration of the initial contract period, with no provision for early termination. It shall continue automatically thereafter for the same period, unless terminated by either party giving a minimum of 6 months written notice to expire at the end of the initial period or any subsequent renewal period. the start date was 1 August 2011 for 5 years so I have missed the 6 month notice period by a couple of months. Is there anything that I can do to get out of an automatic renewal of this contract? The electricity and telephone service companies that used to do automatic renewal are no longer allowed to do that since 2011 and a customer now by law gets a letter asking if they wish for the contract to renew? In essence my business has changed as I am changing from being a sole trader to trading as a Company as from 1st April 2016 . The company is a separate entity ? If a business closes then surely they can't hold the business to a further 5 year contract ? Thank you for your advice Ben.
Solicitor: Ben Jones, UK Lawyer replied 1 year ago
Hi there, such automatic renewal clauses can be legal. You are correct that they were outlawed in consumer contracts but this is a business to business contract where it is assumed that the parties have equal bargaining rights. It is basically assumed that you as a business are knowledgeable enough to be able to understand the contract and enter it knowing what you are entering into. So that is why they are still legal in business to business relationships. As a sole trader the business is not actually treated as a separate entity. You are personally responsible for the business debts. Had you been a limited company that is when it is a separate entity but in this case you are personally liable for the debts. So if you renege on the contract they could pursue you legally for damages. However, they are not entitled to the full amount of their service until the end of the contract. They are entitled to compensation/damages which is their loss of profit. So it would be the actual profit they may have made, not the direct cost of services to you. You can try and cancel the contract and send them a cheque or payment and tell them it is in full and final settlement of the fees you would owe them and if they cash or accept that payment then you can argue that they cannot claim further against you. At least try that, you have nothing to lose. I hope this has answered your query. I would be grateful if you could please take a second to leave a positive rating (3, 4 or 5 stars) as that is an important part of our process and recognises the time I have spent assisting you. If you need me to clarify anything before you go - please get back to me on here and I will assist further as best as I can. Thank you
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Solicitor: Ben Jones, UK Lawyer replied 1 year ago
Hello, I see you have read my response to your query. If this has answered your question please take a second to leave a positive rating by selecting 3, 4 or 5 stars from the top of the page. I spend a lot of time and effort answering individual queries and I am not credited for my time until you leave your rating. If you still need further help please get back to me on here and I will assist as best as I can. Many thanks.
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Solicitor: Ben Jones, UK Lawyer replied 1 year ago
Hello, do you need any further assistance or are you happy with the above response? Look forward to hearing from you.
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