Is automatic contract renewal for advertising legal?

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Is automatic contract renewal for advertising legal?

I advertised my business with AT&T, but I went out of business in 2010, stopped all other forms of advertising, and paid out the end of my contract with AT&T yellow pages. I did receive a phone call in mid-2010 from an AT&T rep asking if I wanted to renew for 2011, and I stated no. My mistake was not recording or documenting the time, date and name of the rep. I was of mindset that I was done. However to my surprise I continued to get bills from AT&T advertising. They say that I am under an “automatic renewal” contract. I never agreed or signed up for this. Is this legal?

Asked on March 24, 2011 under Business Law, Michigan

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The problem here sounds like there is an “evergreen clause" in your contract.  Many contracts (especially service or supply contracts and leases) include such a clause.  This type of contract automatically renews at the end of the contracted term, unless one of the parties notifies the other party that it does not want to renew the contract.  Typically, this notice must be given within a specified time period prior to the end of the current term.

What you need to do now is to review your contract for this language.  In fact, you may just want to speak to an attorney directly and have them review it for you.  They can best advise you as to your specific rights/responsibilities under the contract in question.


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