What to do if a vendor demands an increase in price for the next term less than a month before the renewal date but 60-day notice is required per contract?

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What to do if a vendor demands an increase in price for the next term less than a month before the renewal date but 60-day notice is required per contract?

We have worked with a vendor for the last two years, the first contract renewed

automatically no problem. Now, less than 30 days before the end of the

contract, the vendor is asking for $500 increase in price for the next term. They argue that the BAA signed 2 years ago is expensive. This puts us in a very frustrating situation as migrating from their service is impossible in 30 days and

will hurt our business. There is a term in the contract that 60 days written notice is required for any changes otherwise the contract renews automatically the vendor declines. How can I enforce this term?

Asked on June 28, 2018 under Business Law, North Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

If, as you write, 60 days written notice was necessary for a change like this but they only provided 30 days notice, they cannot get the increase: the terms of a contract are enforceable. If they will not sell you the service at the existing price and you have to migrate go a new service, you could sue them for compensation based on "breach of contract": e.g. for any lost business or profit due to disruption, for the increased cost of obtaining this service elsewhere, etc. Of course, litigation can itself be expensive and disruptive; consider trying to negotiate to a mutually agreeable compromise (e.g. maybe $200 more?) to avoid litigation and having to find a new vendor on short notice.


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