Is Your New York Debt Collection Claim a Result of an Automatic Renewal Clause?

Your New York debt collection claim is for non-payment of the monies owed pursuant to a contract that has an auto renewal clause. The balance would have covered your costs or represents your profit on the job.

Thinking that you have annuity income because the contract has an automatic renewal clause requiring the customer to give you advance notice of cancellation? You know, ideally the customer may forget to cancel and then you have income for another year.

Well, don’t sit back and count your money yet. If you have smart customer and/or you have failed to act as required by New York law, you may not be entitled to payment to collect a New York debt collection claim for monies owed as a result of service contract that has an automatic renewal clause.

If your contract has an auto renewal clause requiring a customer to provide notice that they do not wish to continue before the expiration of the term of the contract this law applies to you and will affect your recovery of the New York debt collection claim.

The law in New York provides that if your contract provides that a customer must notify you before the end of the term of the contract that they do not wish to extend the contract. YOU MUST give that customer written notice.

Specifically, if your contract contains the requirement for a written notice of cancellation by the customer or the contract will auto renew, the burden is actually on you to give the customer written notice that the contract will automatically renew.

In a nutshell:

  1. Notice must be given at least fifteen days and not more than thirty days previous to the time specified for serving such notice upon him/her,
  2. Shall give to the person receiving the service,
  3. Maintenance or repair written notice,
  4. Served personally or by certified mail,
  5. Calling the attention of that person to the existence of such provision in the contract.

Whether you sold or leased goods to the customer with a service contract to service, maintain or repair the goods/services. Quick examples that may come to mind: a copier and service contract or an elevator repair, modernization or overhaul with a service contract.

You need not have sold or installed an item as part of the transaction. You could have merely sold the service, maintenance or repair contract to the customer.

Regardless of the facts and circumstances of the sale to the customer, if you sold or assumed a service, maintenance or repair contract that includes an auto renewal provision take notice this applies to you and will affect your ability to collect monies owed including in a New York debt collection claim.

Is your profit in the service contract of sale? Protect your investment. Make sure you will be able to recover monies owed in a New York debt collection claim.

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