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Tip 9: Service Contracts
· Watch out for Service Contract Auto Renewal Clause….
As a business owner you will be entering into many different type of service contracts, such as, advertising, utility, maintenance, etc. Many times you do not have an attorney review these types of contracts because they seem simple and explanatory.· Common Avoidable Costly Error Business Owner's Make…
Most service contracts have a clause, generally located on the back in fine print, that states: This agreement shall thereafter continue on a year-to-year basis unless written notice of termination is given by either party to the other at least ninety (90) days prior to the expiration of the initial term or any annual extension thereof.This means that unless you are thinking three to four months in advance of your contract expiration you will be automatically renewing!
You should keep a log of the contracts you have entered into, their expiration dates, and the date when you need to make a decision to renew or not…otherwise you will not have a choice!! Then be sure to check this log on a consistent basis.