How to Cancel a Service Agreement

By Victoria McGrath
Review the termination clause of the service contract you originally signed.

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A service agreement can be canceled at anytime. The party who cancels the agreement will be liable for all costs associated with the cancellation. The cancellation must be executed in accordance with the terms of the contract or it can be considered a broken contract or breach of contract. Statutory law protects the rights of consumers to cancel service contracts under certain circumstances.

Obtain a copy of the original service agreement that you signed as well as any accompanying documents. Verify that the document is the exact one that you signed at the precise time and date. Review the document to ensure that it includes the services that your ordered, the terms that you agreed to and signatures of both parties.

Collect all of your past bills or receipts associated with the original service agreement. Organize your documents in chronological order from the first bill that you received. Total your standard cost and your additional cost separately and then together.

Read through the entire contract that you signed. Make notes in the margin of each clause regarding whether each clause was fulfilled or not fulfilled. Specifically analyze the language of the cancellation clause. Use a highlighter to highlight the terms of any cancellation. List the penalties in the margin.

Calculate the penalties based on your personal situation. Add up any base cancellation fee, plus any fee applicable to the length of the contract. For instance, a two year service contract for $5000. broken after one year leaves a one year commitment on the contract. 50% of the contract remains with a value of $2500. owed. This is your maximum liability on the contract. You can buy yourself out of the contract for this amount of money, regardless of the terms.

Create a list of reasons why you want out of the contract with the benefits and detriments of cancellation. See if the other party is willing to work with you and let you out of the contract with reduced liability. If the other party has failed to perform its responsibilities under the contract, seek to terminate the service agreement for breach of contract based on non-performance.

Contact the service provider regarding the service agreement and ask what the options are to cancel the contract. The company may state that you can not cancel the contract at this time. Remember you can always cancel the contract. Research your statutory rights to cancel certain service contracts without penalties. Ask what penalties will be assessed if you cancel immediately and if any fees can be waived.

Send a written request to cancel your service agreement based on specific reasons. Address it to the CEO. A letter to the CEO is often passed directly to a high level manager with the authority to resolve the issue immediately. Send the letter certified mail. Call the company back within thirty days to verify your account balance. Dispute any unwarranted cancellation fees in writing.

About the Author

Based in Los Angeles, Victoria McGrath has been writing law-related articles since 2004. She specializes in intellectual property, copyright and trademark law. She earned a Juris Doctor from the University of Arizona, College of Law. McGrath pursued both her Bachelor of Arts and Master of Fine Arts at University of California, Los Angeles, in film and television production. Her work has been published in the Daily Bruin and La Gente Newsmagazine.

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