The Joy of Walking Away

I handled agreements and contracts between the State and vendors for over twenty years. I can handle Force Majeure (an act of God), or indemnification (limiting liability), and the thirty other terms and conditions with the best of them. But I went thru heartache and thousands of dollars before I learned the most important term in every agreement (legal, binding contract).
And that term is what most people gloss over. 

It's the "Termination" clause.

Oh yes, you want to buy their product, sometimes badly. Sometimes its the only one of its kind on the market, so you put up with onerous terms like absolving them of all liability for their actions or their product defects, limiting your recourse to only a refund of the money you paid and nothing else.  And never is there anything written in the contract about how well the product or service performs. Always sold "As is." Does it do what you bought it to do? The essential question of every buyer on earth, "Will it do what I expect it to?"  The vendor takes no responsibility amd makes no promises.

Oh, and so let me answer this essential question for you. "The product or service will only perform, or be as good as, what the agreement says." Rule of the road.  At best you get the product name like "Microsoft Office 2010," and little else except a glossy brochure, if you're lucky enough to get that.

I've already written that the first thing to do on a product website, is to find the product specifications. If you can't find any? Buyer beware. Guaranteed your chances of being dissatisfied or disappointed just skyrocketed.

So back to Termination. You "receive" the product (online download, in the mail, at the store counter etc.). You paid good money for it. It should work. You try it. It fails to perform to your standards, or and this happens more often, it doesn't operate as advertised. Three questions arise. Can they fix the product at no charge to you? Yes, they may fix the product, but there's usually a charge regardless, even if just shipping. Can you get a refund? If you used a credit card, yes, by disputing the charge with your credit card company, who will block future vendor charges and give you a refund on your next bill. If you paid cash? Good luck with that. Yet most retail stores will give it to you, or in store credit, with a receipt (I've already written how important that is!).

With New Jersey State purchases we payed thousands, tens of thousands, and millions of dollars for goods and services. A billion $$ worth every year. Getting our money back was/is very important. The most important.

Hence the Termination or Cancellation clause. Termination ends the total agreement, everything null and void. Cancellation modifies or ends certain conditions. 

A good example. When I bought mainframe computer software for millions of dollars, the software companies always, always had an Evergreen clause in the contract, which means  you continually pay their fee, forever. That's right, forever! Although it doesn't use that word, it's left open-ended.  The renewal payment (and price increases) occur on the anniversary of the purchase, every year.

That's where the Cancellation clause comes in. We adjusted the vendor's cancellation clause to state "Customer will notify Company within thirty (30) days of contract termination or payment renewal if it intends to renew. Absent such notice, Customer will not be responsible for renewal payment." At the very least, this meant that every year the vendor called us with the new fee and we at least got a chance to negotiate, which, sometimes lowered the fee, even though we had no intent to cancel.

Most contracts you have, without realizing it, have this "Evergreen Clause." Your utility company, your heating and air conditioning provider, Verizon, your mobile phone company, etc. that's if you weren't careful to get the agreement terms, in writing, up front. Have you ever read these agreements? You get 'em you know. Lots of 'em. I'll bet a buck you haven't.

The product's bad. You don't like the company or its lack of an 800 number. You bought something to replace them and their product or service. Guess what? You're stuck by what the Termination clause states. Someday I'll write about how to get out of it anyway, but not today.

So check your Agreement and cancellation, renewal and termination clauses. 

Stop wasting money on something you don't need or want anymore.

By Rodney Richards, NJ