If we signed a contract with a local company for a dumpster and garbage pickup, what is our legal obligation to stay with a successor company?

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If we signed a contract with a local company for a dumpster and garbage pickup, what is our legal obligation to stay with a successor company?

They since have sold there business to another company that is out of town which cost us more money due to a fuel surcharge and other fees the prior company didn’t have. We tried to call and cancel thier services because we found another local company with competitive pricing. The company tells us that we cannot cancel because of an automatic renewing 3 year contract. We had no idea it was auto renew. They said they can do this because they bought the contracts from the prior company. We have never signed a new contract with this new company nor did we agree to these new charges put on us. Is there anything we can do about this?

Asked on September 30, 2014 under Business Law, Wisconsin

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

1) Review the contract you signed--did it state it would automatically renew? If it did, and the new company bought the contract (see below), then you may be held under it, IF it would have renewed under the circumstances. But if it did not state that it automatically renewed, it would NOT renew automatically; automatic renewal needs to be stated explicitly in the contract.

2) Also check the contract to see if it had a term or provision stating that it could be assigned (bought by another) or not. If the contract was silent as to that, then it could be assigned; but if it said it coud not be assigned, then it could not be and the new company may not have been able to take it over.

3) Even if it did renew and could be assigned, they cannot charge you more than the contract itself allows; if the bought the contract, they are limited to the prices and fees it provided for.

 


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