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Business owners should watch out for renewal terms

9/30/2011

While each part of software contracts can be critical to the overall success of the relationship, one part of the deal that business owners may want to be particularly aware of is automatic renewal contracts.

If they don't anticipate sticking with a particular service forever, business owners should be very aware of the specific contract terms surrounding automatic renewal clauses, writes South Florida Sun-Sentinel columnist Daniel Vasquez.

While this type of contract is more common for items like a magazine subscription or radio service, it's also present in many other types of contracts as well.

Under this type of agreement - which Vasquez says is sometimes also called negative billing - a contract is automatically renewed past its initial end date if it isn't cancelled by one side or the other before a specified date.

Vasquez adds that many states, such as Florida, have specific rules regarding disclosure of these kinds of contract terms, it's still important for people to thoroughly read over any contracts before signing them.