Early termination fees for waste services

Hi all, apologies if this is the wrong forum.

So our business employs XYZ company for their waste disposal services for a period of 12 months.

I have since found a better price with another supplier and I wish to terminate our contract with XYZ.

Obviously I have tried to negotiate with XYZ but I was not satisfied with their services so I decide to go with my new option instead. In this conversation, the manager brought up the fact that legal would have to be called because of the early termination.

I have had a look through our service agreement with XYZ and there is absolutely no mention of any early termination fees and would like to know if XYZ has any right to compensation to the otherwise 'foregone' fee revenues?

Keeping in mind that there has been no breach of contract and is just our business shopping around for a better deal.

Edit: Not sure if this matters, but this is a standard form contract.

Comments

  • +2 votes

    You are breaching the contract if its a commitment for the full 12 months and you want to break it.

    No such thing as a standard form contract.

    Get some legal advice!

  •  

    What do you think a standard form contract is?

    Is the term for the contract specified, or was the 12 months a verbal or informal agreement?
    Does it say you don't have to pay if you choose to terminate prior to the end of the term?

    •  

      Hi, there is no mention of any early termination fees in my agreement.

      • +1 vote

        There wouldn't be if there is no option to break the contract early.

      • +2 votes

        Early termination fees exist if you or the other party request them.
        I am no lawyer, and no doubt a Law 101 grad will be along shortly, but you have agreed to give them business for 12 months.
        They can now rely upon that commitment, and you got the benefits you originally sought (waste removed at a agreed price).
        If you cannot or will not perform your end of the deal, the other party is still entitled to the profits they would have made, unless you negotiated something less.
        They can sue you for this, and you might have to pay their legal fees too.
        If you add the costs to leave this contract (their costs, plus their profit) to the price of the new supplier, the new deal would have to be pretty sweet to be better!

  • +2 votes

    …since found a better price with another supplier and I wish to terminate our contract with XYZ.

    Obviously I have tried to negotiate with XYZ but I was not satisfied with their services

    I think you were not satisfied with their price and you're now unhappy that they're not willing to terminate the contract without fees.

    Just go through the terms you've agreed to and change at the end of contract.

    •  

      Hi, you're right this was a mistake in my post. I am unhappy with their price but secondary to that is their communication.

      I dont thinkthat you needed to make this point though because I close with the fact that I am well aware this is more of a 'change of mind' as opposed to 'they did something wrong'.

  • +1 vote

    If in whatever you signed or agreed on (paper/email) does not mention any early termination fees/cancellation fees then you're in the OK. Tell XYZ company to show proof that you agreed on cancellation fees. As far as you're concerned, you never agreed to the 12-month contract if there's an early termination fee.
    Unless this XYZ is new, it is very unlikely there is no mention of early termination fees. Please read your contract carefully.

    • +1 vote

      There might be no mention of cancellation fees, because it is a 12 month contract, you pay them for 12 months. You want to employ a new company, fine, but you will still be paying XYZ.

      • +2 votes

        I was gonna edit but you replied LOL

        OP, have a read on ACCC's explanation on early termination contract: https://www.accc.gov.au/about-us/tools-resources/social-medi...

        Even if you were not aware of the fees existence, you may still be liable if XYZ company can reasonably work out that they're losing $ from you breaking the contract.

        •  

          Thanks for the response, I have read the entire transcript in your link about the early termination fees I would be fully prepared to pay these if they were stated in our agreement but they're not, which is weird considering XYZ is a well established player in waste disposal.

      • +1 vote

        Could you elaborate on this a bit more? How does this work in comparison to something like a mobile phone contract? They all have early termination fee clauses.

  •  

    A contract is a legal agreement, that you would pay x for a service provided for 12 months of time. By terminating the contract early, you are in breach of the contract, so obviously the other party will want financial recompense.

    Just because there is no early termination fees, doesnt mean they cant sue you for breach of contract and any financial losses they incurred because of that breach.

    Talk to a lawyer, you either do not really understand what a contract is, or should never have signed it before getting legal advice in the first place.

  • +1 vote

    Hi,
    I have some experience with this.
    The first thing ever is to get some legal advice.
    Have you read the T&C attached to the contract that you signed?
    Speaking in general here, It is very common to have Early termination clause. It is also common to have a mutual agreement termination if there are issues around the service, but it is pretty hard to get to that point as you have to give the opportunity to service provider to rectify.
    12 months is a fairly short term for the waste companies, as they have to cater for you with the uncertainty that you will be there in 3 years time (time of depreciation of the bins for example).
    If you are a small business you have very little negotiation power with them. How big is the price difference?, Can you go with the quote provided to you and see if they can improve?, Perhaps, ask for an improvement with an extension for another 12 months?

    PM if you want to talk more details, but have in mind that I am not a lawyer.
    good luck

  •  

    If you breach the contract they are entitled to damages whether there is an early exit fee clause or not.

  •  

    if the contract was non exclusive and has no min monthly fees the you keep the original contract but advise you would like to pause services for now.

  • Top