January 2020

2021 Midwest Road, Suite 200, Oak Brook, IL 60523

Month: January 2020

Can Contracts Automatically Renew?

If you read your contract carefully, you may find a clause that reads something to the effect of:

Automatic Renewal. This Agreement shall be automatically extended for one additional year, unless on or before [DATE] (for the initial term), either Party provides to the other written notice of its desire not to terminate this Agreement 60 days before the termination date.
This is called an 'automatic renewal clause' and sometimes known as an 'evergreen clause.' They can be convenient in some instances where you want to commit to something long term or you have a membership that you are happy with. But I've seen some of these go pretty south, especially when one party is not happy with the services and wants to terminate.

As I've written about before, people are free to put in their contracts almost anything they want. However, some contract terms are not enforceable, even if the parties agree to them. Or sometimes the law or courts have conditions for certain terms to be enforceable. Automatic Renewal clauses, specifically when the relationship is a business to consumer (B2C) contract, are in fact regulated in Illinois by the Automatic Contract Renewal Act (ACRA), 815 ILCS 601. ACRA, in short, states when a business as an automatic renewal clause, then the business must make the renewal clause 'clear and conspicuous' and include the cancellation clause.

But that is not enough. The business must also provide a written reminder to ...

Top 4 Reasons Some Contracts Stink

Contracts are an essential part of both our professional and personal lives. As humans, we deal with contracts almost daily, often without even realizing it. Whether a company wants to come and provide a service to our home or we are in the process of closing a business deal we review, negotiate, and sign contracts almost daily. Unfortunately, many contracts are poorly written resulting in conflict and lawsuits. There are many reasons for this, and I, as an Illinois contracts law lawyer, will explain below why poorly written contracts exist begin with. But first....

What is a Contract?

Before understanding why poorly written contracts exist, it is important to understand what a contract is and why they are important. A contract is a legally binding agreement between parties in which the parties make an exchange. The purpose of having a contract is to ensure the parties have a legal remedy should one party breach the contract. Otherwise, the contract is not worth the paper it is written on. When a contract has terms that are not enforceable, the parties can run into serious problems getting their rights and maybe even getting into lawsuits. So what are the most common contract mistakes? Here are the top 4 contract myths I have seen in my practice.

  1. Having Too Much 'Template' Language

    Template terms, also known as 'boilerplate language' are great tools to get some guidance because there is no need to reinvent the wheel when drafting similar