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2016-12-17 18:11:29

Please help me with interpretation of below clause.

8.1 Term. This Agreement will commence on the Effective Date, and unless otherwise stated on an Order Form, this Agreement will remain in effect for the a period of one (1) one years. Thereafter, this Agreement will automatically renew for additional one (1) periods at the then current List Price unless party provides at least sixty (60) days written notice to the other party intent not to renew.
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 •  IACCM  •   2016-12-18 00:28:32
In addition to the grammatical mistakes, this term is confusing. First, it seems to be directed less at the issue of the term and more towards the price and potential for price changes (obviously I do t know whether there is a separate clause governing price changes). So it appears to be trying to set a potentially unending term at the present price, because it automatically renews unless the supplier notifies non-renewal (which can be done at any time so long as it is at least 60 days prior to the end of a one year period). I don't know what right, if any, the customer has to terminate - based on this clause, it would appear none.

But what is incrementally confused is the fact that the clause relates to 'this Agreement' and then references Order forms, suggesting there are potentially multiple contracts under the Agreement. So surely it is the context under an Order form that would terminate or be renewed. But as worded, it would actually be the Agreement - thereby leaving other Orders in limbo.
 •   2016-12-18 05:25:47
Hi Tim,

Thank you for your prompt response. As per Order Form term was set for first 3 years i.e. 2010 to 2013 and then it extended to further 3 years for 2013 to 2016.

According to me below is interpretation.

Interpretation: This agreement will commence on the effective date and will remain in effect for a period of 1 year from the commencement date. If any other duration is mentioned in the Order Form, then the duration mentioned in the Order form will be applicable. After completion of the initial term, this agreement will automatically renew for an additional 1 period (period mentioned in the Order Form) at the then current List Price mentioned in the Agreement. If any party gives a written notice at least 60 days prior to the end date with an intention of not to renew, then this agreement will not renew automatically. Hence, there was only one period to renew automatically which extended on 2010 now including extended period this agreement will expire on 21st December, 2016.

I am at Supplier side. I want to exit from this contract. Please advice how can we do that.
 •  Conga  •   2016-12-20 19:09:16
It's a 1 year term, with automatic renewals (not enforceable in all states, for example, not in NY) of 1 year each, unless someone terminates with at least 60 days notice before the end of any term.

So putting aside enforceability issues, assume Effective date = Jan 15, 2015, then before November 15, 2016 you would be able to cancel the renewal, and again before November 15, 2017 and so on.

You should be using Counselytics, as we can help. Www.counselytics.com

 •  IACCM  •   2016-12-30 17:40:30
Based on your explanation, it seems to me that you had to provide notice at least 60 days prior to December 21st, otherwise there is an automatic 1 year renewal at your current list price - ie until December 21st 2017. You can give notice at any time - it just has to be at least 60 days prior to the next period end date.
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