united-states contract-law canada
Service Engagement Implicit Renewal
<p>I have a question about contract law within the following scenario:</p>
<p>Say the original contract/engagement letter is for 2 tax filings with Acme Tax Accountants. Each filing is $1,000 for a total of $2,000. This service is performed and paid.</p>
<p>The next year a third tax filing is done by Acme Tax Accountants but no new contract/engagement letter has been signed with the client. At the end of this service a $1,500 invoice is sent (a 50% increase).</p>
<p>My understanding of contract law is the original fees are implied if no new explicit agreement is signed and therefore the invoice amount should be $1,000. Is that correct?</p>

<blockquote>
<p>My understanding of contract law is the original fees are implied if no new explicit agreement is signed and therefore the invoice amount should be $1,000. Is that correct?</p>
</blockquote>
<p>No. At the outset, the presumption that the price would be equal to that of filings covered in the engagement letter is inaccurate. The actual terms of the engagement letter might support a different conclusion, though, which is why I <a href="https://law.stackexchange.com/questions/86595/service-engagement-implicit-renewal#comment193659_86595">asked about them</a>.</p>
<p>The offer in the engagement letter seems to be just a marketing practice, and as such it is neither uncommon nor unlawful. The rationale for that marketing practice is that offering [in this case] the first two tax filings at a lower price is likelier to persuade new customers to try the services the company provides. Thereafter, those customers will be billed what the company would call a <em>normal</em> or <em>ordinary</em> price.</p>
<p>Statutory law does not provide specific constraints to how greater the ordinary price. But the details would help ascertain whether an excessive, unannounced increase amounts to what is known as <em>unfair and misleading practices</em> or otherwise contravenes consumer protection laws. These laws vary by jurisdiction and might or might not defeat the argument that the customer <em>bears the risk of mistake</em>. See <a href="http://www.oneclubofjusticides.com/p/restatement-second-contracts.html" rel="nofollow noreferrer">Restatement (Second) of Contracts</a> at §154(b).</p>

<h2>Your understanding is not correct</h2>
<p>If a contract is silent on price then a reasonable amount is implies. Prices charged in the past will inform what is reasonable but they don't define it.</p>
