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Odd contract phrasing: "renewable?"

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by tkc,

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I am determining the obligations of an old contract with my main client. The original contract was signed on or around March 1, 2000, and the phrasing of the duration is as follows:

"The term of this agreement is for 2 years and will commence onMarch 1, 2000 and is automatically renewable in 1 year increments unless either party terminates the agreement as stated in section 9."

(Section 9 stipulates 90 days written notice is required. That's the possible sticking point. I want to be fair to this client -- they've been very good -- but my next client probably won't wait 90 days for me. 30 days seems reasonable all around.)

This is the only contract I have ever signed with them. The two years are long since over. The questionfor me then, is "Am I still bound now by this contract?"

It says the term is for 2 years -- so as of March 1, 2002 it's hold on me should be over. But...it says it's "automatically renewable in 1 year increments." What exactly does that mean? Does "automaticaly renewable" mean it actually IS automatically renewed/extended? Or does "renewable" mean we *could have* renewed it, perhaps by signing an addendum to it?

Looking at it more carefully now, it seems rather contradictory.

Thanks,
- Tom

4 replies

by madroxxx

The way I read it would renew automatically renew and you are now under contract until March 1, 2003. Furthermore you need to put in your written notice before December 1 2002 if you don't want it to automatically renew again.

If you really want out you might want to cunsult an attorney.

by timwalsh

If a lawyer had looked at this he probable would have changed to phrasing to be "...is automatically renewed..." to remove any ambiguity. However, unless you stopped working for your present client as of March 1, 2002, then by ANY legal definition,the contract is still in force.

I think that most people (lawyers aren't really people) reading the "renewal" clause would interpret it as follows:

If neither you nor your employer has terminated the agreement, you both are still bound by it because of the "automatic renewal" clause.

This was probably phrased this way to prevent having to do new paperwork every time a renewal takes place.

Another sticking point is the phrasing of Section 9: It was probably meant to mean 90 days prior to the renewal date, in which case, trying to end the contract at any other point could be grounds for breach of contract. But it could be interpreted as meaning the 90 day termination notice could be given at any time.

I would search the contract for any clauses dealing with "early termination of the contract." This clause, if it exists, may be your only way out of the contract before March 2003.

by daviestrachan

My thoughts
Why don't you talk it over with the client. He may not bind you to this.
Depending on the work load you may be able to fulfill both contracts (sub-contracting when necessary).
Dave

by tkc,

Dave, Mabel, Tim -

Thanks for your input. I did consult a college buddy who is now a law professor, and he pretty well assured me that (1) yes, the contract renews automatically for another year, and (2) at any point in the year I can issue my 90-day notice and find my way out.

And of course I will try to work things out with this client. They want to get work done, not wrestle me into doing work I'd rather not be doing! And I want everyone feeling good about the final outcome. To paraphrase Gandhi, I want to leave but I want to leave as friends. And if I want out, it's in both our best interests to let me go. (Would you fight to keep a disgruntled contractor neck-deep in your flagship system if you didn't have to?)

And itturns out my original contract is for just 32 hours a month. So despite the fact that they let me crank that up to 40/week after a few months, my contract was never changed to describe that. So, I could do 32 hours a month and still be in good stead. And I can do THAT for 90 days if needed.

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