Duration of a contract

Before concluding a contract, you should check its duration. It may be a one-time or long-term contract. Long-term contracts include ongoing and fixed-term contracts.

One-time contract

In one-time contracts, the parties fulfil their obligations once and for all. Such contracts include buying groceries in a supermarket and purchasing a car or a house.

Long-term contracts

An on-going contract is valid until it is terminated. It ends after the period of notice specified in the contract. Typical ongoing contracts include electricity supply, waste management and district heating contracts and magazine subscriptions.

A fixed-term contract expires at a specified date, for example after 12 months. A fixed-term contract cannot normally be terminated.

Renewing fixed-term contracts automatically is prohibited; this means that when the expiry date has been reached, the contract may not be automatically renewed as another fixed-term contract. However, a fixed-term contract may be turned into an ongoing one after a certain date if the ongoing contract can then be terminated with a normal period of notice. If a company offers this contract model to a consumer, the consumer must be clearly told in advance that the contract will automatically continue until further notice when the fixed-term contract period expires.

Typical fixed-term contracts include gym memberships and pay-TV, broadband and telephone subscriptions.

Read more about terminating a contract  

For companies