Legal Question in Business Law in Illinois

Termination of Contract

I enrolled in an alarm monitoring service under a 3-year agreement that include a renewal option after the 3rd year.

At the end of the 3-years I could terminate the contract because the cost of the equipment I purchase would be paid for.

However, when I tried to terminate the contract at the end of the 3rd year I was told I could not do so. The reason I was given was that ''the contract stipulated I needed to give 30-days notice prior to the end of the year'' otherwise the contract would automatically renew for another year.

In actuality I notified the Alarm Company, Monitronics, that I wished to terminate the contract 10 days before the end of the 3rd year by mail, phone and fax and they have refused to terminate the contract and refused to terminate monitoring. Is this practice of automatic renewal illegal?

and if so, what can I do about it?


Asked on 11/22/03, 6:11 pm

1 Answer from Attorneys
John Pembroke John J. Pembroke & Associates LLC

Re: Termination of Contract

I have drafted many contracts with language similar to yours in them, where the parties intend a longer-term relationship.

The answer to your question is one of construing the terms of the contract, which on its face appears to renew automatically unless canceled in accordance with that clause of the contract. At common law, in a real estate lease, EXACTLY 30 days was required to renew or terminate a lease for a one year term. However, your relationship is governed by the Uniform Commerical Code, and not common law real estate rules. Apart from the termination language, remedies for breach, damages, and substantial performance are issues that should also be evaluated. You need an attorney to review the terms of the document to get an answer, and may need to file a declaratory judgement action.

Our comments are based on treating your question as a hypothetical. Accordingly, our comments could be substantially and materially different were we advised of all of the relevant facts and circumstances. Our comments are by necessity general in nature, and should not be relied upon in taking or forgoing action in your circumstances without retaining an attorney. In order to fully explore your legal matter, you should meet with us or another attorney and bring to any such meeting all relevant documents and correspondence, and any other relevant facts.

We are not hired to be your attorney, and no attorney-client relationship exists between us, unless and until you enter into a written retainer agreement with us, tender the agreed amount for a retainer and it is accepted by us. We reserve the right to decline representation should circumstances change.

As you are aware, in Illinois there are various deadlines for filing a complaint, filing an answer to a complaint, or taking other action in order to preserve your legal rights, and avoid a complete loss of those rights. You should retain counsel immediately in order to be fully advised of your rights, and to be fully informed of the applicable time period within which those rights must be asserted. If you were to delay in doing so, it might result in your potential cause of action being forever barred.

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Answered on 11/23/03, 3:47 pm


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