Consumer Law, Warranties Contract with AutoRenewal

[lisakay64]

I have been in a 5 year copy machine lease with the financial instituion as the third party lease holder. The lease is due to expire March 28, 2006. The rep from the Copy Machine company came by in January with a proposal for a new machine and to tell me I needed to send a letter of intent to the bank or the lease would automatically renew. Upon calling the bank I was told the letter of intent needed to be in 120 days prior to the lease expiring...meaning November of 2005. I have since been told that this is an "evergreen clause" and is illegal in Texas. The back of my lease agreement does state the 120 days and also says that even though I am in Texas the agreement is governed by the laws of Iowa (where the bank is located).

Do I have any recourse at all?

 

[Michael Wechsler]

I have been in a 5 year copy machine lease with the financial instituion as the third party lease holder. The lease is due to expire March 28, 2006. The rep from the Copy Machine company came by in January with a proposal for a new machine and to tell me I needed to send a letter of intent to the bank or the lease would automatically renew. Upon calling the bank I was told the letter of intent needed to be in 120 days prior to the lease expiring...meaning November of 2005. I have since been told that this is an "evergreen clause" and is illegal in Texas. The back of my lease agreement does state the 120 days and also says that even though I am in Texas the agreement is governed by the laws of Iowa (where the bank is located).

Do I have any recourse at all?

Very, very difficult. I always HATED renewal clauses for reasons just like this. They are designed to catch you napping in most instances from what I have seen. I don't know the language but I would say that it is difficult to get out of these and any law in Texas (I don't know for sure) may not apply here since it says that the law of Iowa governs. That doesn't mean you should look to see what Texas law says but I am not confident it will help.

You can do other things to make the lease more costly for the lessor to maintain and then get nitpicky with the small details because you want out. See what you can do to negotiate or try to use whatever leverage you may have. Most important ALWAYS keep track of renewals like these. They are deadly.

Good luck to you and let us know how things turn out.