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However, as soon as a service contract is automatically renewed, all is not lost. Depending on the circumstances surrounding the entry into the service contract, there may be remedies which, under customary law, could result in a separate right to terminate the service contract. The term is governed by the Consumer Rights Act 2015 in the UK, which “aims to protect consumers from unfair contract terms and communications”. Just as in the case of Illinois` Automatic Contract Renewal Act (815 ILCS 601/1), this law emphasizes the transparency of the contract in terms of contract duration and termination: “Your customer needs to know how long their contract lasts and how to terminate it (if they do not wish to renew it).” It stresses that “fair conditions” should be included in the contract in order to prevent consumers from being harmed. Examples of unfair terms cited below have also been described in the law. [16] In 2019, the mobile network company (MTN) launched a subscription-based mobile service in South Africa. The service was a 1 MB mobile data tariff, automatically renewed, which calculated consumers “40c per megabyte whenever they ran out of data.” Subsequently, it was pointed out that this was simply another form of non-bundle data usage plan. Due to consumer reaction, the company was forced to withdraw its data tariff. [31] Let`s say you`re an entrepreneur.

You bought some computer software last year that you hoped would improve productivity, but now you find that your business no longer uses or needs it. Accordingly, you decide to terminate your license agreement with the provider. However, if you call your provider, they inform you that your license agreement with them does not allow you to terminate things and, making matters worse, informs you that you are contractually required to continue paying for the software for an additional full year. An automatic extension clause (also known as the Evergreen clause) is activated towards the end of the contract term, automatically extending the terms of an agreement, unless the contract is terminated (by mutual agreement or default) or one of the parties has sent an end-of-contract letter to other parties before the expiry of the period. T12 [2] [3] An example of the clause is described in the following quote: “Each term is automatically extended by the same duration as the original term, unless one of the parties gives the other party termination at least thirty (30) days before the expiration of the current term.” [4] This Agreement is automatically renewed for an additional ten years at the end of each period, unless either party gives the other party written termination at least 30 days before the expiration of that term. If you fail to agree to remove the auto-renewal clause and there is a good reason to enter into the contract, you should: Alternatively, the parties can enter into negotiations to vary the service contract for the remainder of the extended term….