Supplier contracts: what to review before renewing
Photo: Avila Ops Tecnologia
Before renewing any supplier contract, review seven points: the price adjustment and index, the notice period for leaving, what belongs to you when the contract ends, the termination fee, what is included and what costs extra, the delivery or response time, and who is responsible on the other side. If you cannot answer all seven by looking at the contract, do not renew automatically. Request the document and read it before January.
Many small-business contracts renew automatically in January under automatic renewal clauses, with price adjustments applied without notice. If the notice period is 30 days, December is your last window to read, negotiate, or leave without a fee; if it is 60 or 90 days, the deadline may already have passed, leaving negotiation as your option.
What are the seven points, and what should you look for in each?
| Point | What to look for | Warning sign |
|---|---|---|
| Price adjustment | Index (IPCA, IGP-M, or another) and date | “Adjustment at the service provider’s discretion” |
| Notice period | How many days before the end you must give notice to avoid renewal | 60 or 90 days on a 12-month contract |
| What you own | Data, records, domain, files, passwords | Nothing written about their return |
| Termination fee | Amount or percentage of the remaining balance | Fee based on the entire contract rather than the remaining balance |
| Included and extra | List of what the price covers | “Additional services quoted separately” with no list |
| Response time | Time to handle a support request or deliver | No written deadline |
| Responsible person | Name and contact details of the person accountable | Only a generic email address |
“What you own” is the point that costs the most when things go wrong. A website contract where the agency owns the domain. A software contract where customer records cannot be exported. A social media management contract where the advertising account belongs to the supplier’s profile. While the relationship is going well, nobody reads that clause. When it ends, that clause determines whether you leave with your business or without it.
The comparison Avila Ops vs. a traditional agency shows how this issue commonly appears in website and digital presence contracts.
What should you ask to change before signing again?
A supplier who wants to keep a customer will negotiate in December. Request your changes in writing, in a single message. These changes are particularly worth asking for because they cost the supplier little and mean a lot to you:
- A 30-day notice period instead of 60 or 90. You gain flexibility; the supplier loses nothing if the service is good.
- An ownership and export clause. “All data, records, domains, and accounts created for the client belong to the client and will be delivered in an open format within 10 days after the contract ends.”
- Price adjustments based only on a public index, once a year, with 30 days’ notice.
- A capped fee proportional to the remaining term. A fee based on the entire contract, without deducting what has already been fulfilled, may be reduced by a judge (Brazilian Civil Code, Article 413), but it is better to avoid having to dispute it.
- An attached list of what is included. Anything outside the list must be quoted before work begins.
If the supplier accepts none of the five, you have learned something about the relationship. If they accept most, renew. A good supplier has no problem putting what they already do in writing.
When should you not renew, and how can you leave without a fight?
Do not renew when the service is no longer used as it once was, when the price has risen beyond the value delivered, or when “what you own” remains unresolved. A service the team has stopped using is the same situation as cancel what you do not use: forgotten subscriptions, but with a contract.
To leave: give written notice within the deadline, with proof of receipt (an email with confirmation, or a registered letter with acknowledgment of receipt). Formally request delivery of what belongs to you, with a list and date. Pay everything due through the end on time, so you do not give grounds for a dispute. Complete the migration before the last day, not afterward: domain transferred, data exported, account ownership corrected.
The common mistake is waiting until January to talk, when the contract has already renewed, and discovering that leaving costs 12 months in fees. Have the conversation in December.
What to do now
List the contracts that renew between January and March and request each document. Review the seven points and flag any that fail. Send your requested changes before December 31. If one of the failing contracts covers your website, software, or customer service, and you want to know what would make sense instead, describe your business; the assessment is on us: avilaops.com/jornada or contact us on WhatsApp: wa.me/5517997811471.
Frequently asked questions
Is a verbal or WhatsApp contract valid?
It is valid as an agreement. A verbal agreement is difficult to prove; a WhatsApp agreement is easier to prove, but usually leaves things out. If an important supplier has no written contract, ask for a simple one-page document covering the seven points. If they refuse, you carry the risk.
Is automatic contract renewal legal?
Between businesses, yes, if it is written into the contract. Disproportionate notice periods and fees based on the total are what become disputed. If the contract is with an individual consumer, Brazil’s Consumer Protection Code offers more protection.
Can I leave a contract early if the supplier fails to fulfill it?
You can if you can demonstrate the breach: missed deadlines, missing deliverables, unanswered support requests. Record everything in writing, with dates, before giving notice. Documentation is what prevents the termination fee.
Turn what you learned into your next step.
Tell us about your company and what you want to improve. We can explore the right tools, integrations or custom project together.