Is there such a thing as a self-renewing employment contract?

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Is there such a thing as a self-renewing employment contract?

I’ve worked at a dance studio for 1 year and 1 months. signed a contract for a year, after my boss explained a clause that worried me. The clause said that I would have to pay a $5000 fine for training I had received if I left before a year was up. After my first year, my boss told me the contract was self-renewing. I now wish to resign from my jjob. Can I still be fined for that $5,000 for training?

Asked on March 26, 2012 under Employment Labor Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

1) Contracts can automatically renew, IF there is a clause in them which states that; for example, many leases (which are a type of contract) will renew if neither the landlord nor tenant provides advance notice of non-renewal. However, without such a clause or term, the contract will not "automatically," renew, though it is possible to renew a contract under the same terms (without executing a new one) if the two parties to the contract indicate in some fashion (e.g. by emails) that they intend to renew the contract and continue under it. So there are conditions under which a one-year contract will renew, but it requires either a renewal clause in the contract or some other expression by both you and your employer that you intend to renew it.

2) Even if the contract did renew, if the obligation was for you to pay $5,000 if you left within one year of receiving training, then if one year has passed since the training, you should be beyond the payment period.

The above is based on general contractual principals; since the specific terms of a contract are critical, you should have an attorney review the contract with you.


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