Auto-renewing service contracts.

[P-Jay]

Hi everyone, I could do with some help.

One of our bosses (we're a very small Ltd Co) signed up to an IT Support contract with a local supplier three and a half years ago. They've been pretty terrible for most of this time and I'm looking to move away. The price has also risen from less than £200 a month to almost £800 per month.

The original contract was for 3 years, which has now ended so I've asked to move away, they've said we can't.

Tucked away in the Ts and Cs is the following:

3.1 The Support Services shall commence on the commencement date and shall continue for a period of 36 months. (the "initial period")
3.2 If the customer wishes to terminate this agreement at the end of the initial period it must give at least 90 days notice of its intentions to terminate such notice expiring on the last day of the initial period.
3.3 (this covers leaving withing the first 14 days)
3.4 (this covers leaving withing the first 14 days)
3.5 (this covers leaving withing the first 14 days)
3.6 If the customer does not give notice in accordance with clause 3.2, this agreement shall continue for further periods which are equivalent in length to the initial period (the "extended period")
3.7 if the customer wishes to terminate this agreement on the anniversary of an extended period, it must give at least 90 days notice of it's intention to terminate such notice expiring on the last day of that period.

My understanding of it is that because we didn't give them 90 days notice before the end of the initial period, we automatically renewed for another 3 years, I can give them notice now, and leave in Spring 2022. In the meantime, they can pretty much charge what they like, and if I don't pay them, they can suspend our services. I also can't move away as they won't provide hand-over details until the day before our contract ends.

I feel a little trapped, anyone care to give an opinion on how enforceable this contract is? Or any tips on pushing them to release us without going to court?

Thanks,

[des8]

Unfortunately, an auto-renewal term in in business-to-business contract is valid. In b2b contracts, businesses are assumed to be free to enter into whatever contracts they agree between themselves (there is no relief from a hard bargain).

You suggest their service is terrible.... is that terrible enough to suggest there is a repudiatory breach of contract ?
Have they supplied what was promised?

I suspect that would be your best avenue, as they appear unwilling to negotiate a release fee.

[ostell]

What did the contract say about increasing prices? That could be another get out.

What are they supplying for that £800 per month?

[P-Jay]

Thanks all,

Seems were stuck, but it's really helped me understand why they bill like they do.

We're still billed "IT Support £200" with further entries "additional headcount" "E-Mail support" "Server support" etc.

They've offered a buy-out that's roughly the original £200 x the remaining months of the contract.

I guess we're only contractually obliged to the original cost? I may ask if we can cancel all items not on the contract, stop using them and just pay them £200 a month until the end date, it would work out cheaper anyway.

[ostell]

The email support and server support should be part of the IT support. I don't know how it is different and should get included in the base figure. What on earth is that "additional Headcount" ? Looks like they're trying to claim they had to take on additional staff because they got their original quote wrong.

Where those items in the original quote?

[P-Jay]

The email support and server support should be part of the IT support. I don't know how it is different and should get included in the base figure. What on earth is that "additional Headcount" ? Looks like they're trying to claim they had to take on additional staff because they got their original quote wrong.

Where those items in the original quote?

Hi,

The original quote only covered headcount for 5 of us at £20 per head, per month. We've grown over the last 3/4 years since they started, rather than changing the support figure (which I guess may require a new contract) they bill separately for this as "additional headcount". It's not on the original quote or contract.

When we originally signed with them our e-mail was hosted on-site via a SBS server, this has been replaced by their cloud hosted solution, it's separate to support and isn't covered by a contract. but they bill separately for it.

[ostell]

Does it mention the original headcount in the ontract?

Did they ask your permission to move to a cloud server?

Why is support for the items on a cloud server attracting an additional charge when it was included when onsite?

Does the database and email need to be accessed from other locations? ie why put it in the cloud when you had a perfectly good server on site. The cloud solution could be a solution to a non existent problem

[P-Jay]

Does it mention the original headcount in the ontract?

Did they ask your permission to move to a cloud server?

Why is support for the items on a cloud server attracting an additional charge when it was included when onsite?

Does the database and email need to be accessed from other locations? ie why put it in the cloud when you had a perfectly good server on site. The cloud solution could be a solution to a non existent problem

Yes headcount is mentioned on the contract, it's, as far as I can tell "IT support for 5 users over 3 years" the rest is supplemental and not on the original quote or contract.

The move to cloud e-mail was before my time, but I've no reason to think we weren't quoted and signed it off.

Our SBS server was pretty old and ran SBS 2008, SBS had ended when we needed to replace it and buying an Exchange Server for such a small business was impractical. My preference would be to use MS 365, it's cheaper than their hosted cloud offering and has better features. They want a fortune to migrate us over, which was actually the reason why I started to look elsewhere for support.

We're fairly committed to buying out of the contract now. Our new supplier will complete the 365 migration for free and I know and trust them, they supported us at my last place.