Have you or your company ever been roped into a new term on an expensive service contract because you forgot to cancel? If so, you know how expensive unwanted renewals can be. You often must buy your way out of the “remaining months” on a contract.

You have all seen the contracts which automatically renew unless they are “cancelled in writing at least thirty (30) days before the expiration of the initial term.”

Utah has a law that can help prevent those unwanted automatic renewals from sneaking up on you.

The law, which is found in UCA 15-10-201 says that service contracts in Utah signed after July 1, 2011, which exceed 12 months, will not renew unless:

• There is written notice of an automatic renewal provision on the first page of the contract; and;
• The vendor supplies written notice reminding you of the automatic renewal clause. The written notice must be given in one of the following three ways:
  • Personally, or
  • By Certified mail, or
  • Prominently on the first page of a monthly statement
• As far as timing goes, the vendor’s written notice must be provided:
  • No sooner than 90 calendar days before the last day on which you must give notice of your intention to terminate the contract, and
  • No later than 30 calendar days before the last day which you must give notice of your intention to terminate the contract.

What happens if the vendor tries to renew a contract without complying with requirements of UCA 15-10-201? UCA 15-10-202 says that:
a) the automatic renewal provision of the contract is void and unconscionable, and
b) the service contract will renew on a month-to-month basis.