Cancellation, termination, interim price increase
In service agreements (such as ICT services, consultancy, cleaning services, or gym memberships), rules on cancellation, termination, and renewal are important.
The company must clearly inform the consumer whether and how the agreement can be cancelled or terminated.
These rules must be included in the general terms and conditions and must comply with the law.
Cancellation/ termination before the work start
If a party wants to cancel or terminate the agreement after it has been concluded but before the work has started, the following rules apply:
- Cancellation requires the consent of the other party;
- In the case of a distance sale, the consumer has a cooling‑off period of 7 working days;
- Cancellation is allowed if the agreement includes clear cancellation conditions (for example: free cancellation up to 48 hours before the service).
Note:
Cancellation without a valid reason may lead to a claim for damages due to breach of contract.
Termination/ cancellation during the term of the contract
The agreement may be cancelled or terminated during its term:
- If the consumer or the company does not comply with the agreement (unless the issue is minor);
- By written notice or through the court;
- Either party may claim compensation for damages, depending on the situation.
The company may charge cancellation fees. These must be reasonable and may cover:
- Work already performed;
- Materials already ordered;
- Staff already hired or scheduled.
Tacit (silent) renewal of a fixed-term agreement?
A fixed‑term agreement (for example, 12 months) usually ends automatically when the term expires, unless agreed otherwise.
After the fixed term ends, silent renewal is only allowed if:
- The contract terms allow it.
If both parties continue to perform the agreement without explicitly renewing it, an open‑ended agreement may arise. This is also known as ‘tacit renewal’.
Important rules:
- Some contracts state that tacit renewal results in another fixed term;
- Other contracts become open‑ended and can be terminated with reasonable notice;
- General terms and conditions may not provide for silent renewal of a consumer contract for more than 12 months.
Note:
Silent renewal is not always in the company’s interest. The company may wish to review or change the contract terms.
Termination of an open-ended agreement
An agreement for an indefinite period (such as a subscription or maintenance contract) may in principle be terminated, even if this is not explicitly stated.
Termination must take place with a reasonable notice period, unless:
- The agreement or the law sets a specific notice period;
- Termination is only allowed under specific conditions (conditions set in the general terms & conditions).
Interim price increases for subscriptions
The company may increase the price if the government imposes a price increase, for example through a tax increase.
A price increase for other reasons is only allowed if all of the following conditions are met:
- The general terms and conditions allow an interim price increase and clearly explain how and when it applies. The consumer must have received these terms;
- The price increase is reasonable. A price increase is usually unreasonable if the consumer cannot cancel the subscription;
- The company informs the consumer in advance about the price increase, the new price, and the date on which it takes effect.
Sources:
- Article 7:46i, paragraph 1 jo. 7:46d, paragraph 1 of the Aruban Civil Code
- Article 6: 74 of the Aruban Civil Code
- Article 6:265 of the Aruban Civil Code
- Article 6:236 sub j of the Aruban Civil Code
