If a US-based company walks away from a contract with a US-based SaaS provider, which auto renews, without paying or using the service at the time of auto-renewal, what are the chances that it will get sued?

The odds you get sued from walking away from an auto-renewal are low. The claims, even if valid, are almost certainly not worth the legal fees and expenses.

The odds you get sent to a collections agency, or at least a collections department, and are threatened in some fashion? High.

But don’t do it. If you haven’t earned the renewal, you haven’t earned it. If you threaten a customer, there is a small chance they’ll still pay. But you’ll turn them into someone who would Never Recommend to a Friend for life. Just for a few nickels that will never recur anyway.

Don’t waste time chasing non-recurring customers and revenue. Focus on the ones that will be with you the rest of the journey.

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Published on October 31, 2018

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