Can pest service provider cancel contract without reason and keep payment in excess of $1000?

Question

The issue is two fold, I overpaid this pest control company by mistake (4 years worth), the first phone call, they said it shouldn't be a problem but no one called back. I called 7 times before someone called back stating the owner refused to refund the money. I offered to pay for the rest of the year and get the rest back, they refused. When I finally got the owner, he told me he was cancelling my contract, can he do that without providing a reason? and is he able to not provide me with a refund for services not rendered? Business is in South Carolina but I reside in Georgia.

The clause in question for him keeping my money states: "The obligation of company hereunder is conditioned upon payment in full of the initial charge and all regular service charges and failure to pay such charges shall cancel this plant in its entirety and discharge company of any liability, and any amount paid shall become the property of the company. This agreement is for an initial period of one year and shall continue thereafter until suspended by either part"

Cancellations clause says it has to be done in person at their office but doesn't provide any or via certified mail but doesnt describe if he gets to cancel the contract or how I would know.

There is also a clause for mandatory arbitration.

Answer 1

The pest contractor probably wants to keep your money because they are unethical and see it as free. As such, they are quoting legal terms they don't understand to hope you go away. Clearly you paid on time, as you should have had a 4-year credit.

Given that you must proceed via arbitration, a clearly-worded letter stating your rejection of their argument and desire to proceed to arbitration might be enough to get your money back. This is so cut and dried that there is no possible way an arbitrator would side with them - they are trying to steal your money. If South Carolina has a consumer protection bureau this would also be a good option for you, as would the Better Business Bureau where they are located.

Almost any contract can be cancelled after a certain period by either party. That particular clause is there so that if you don't pay then they won't be held liable for termite damage. Because you did pay, they are responsible for the first year whether they like it or not and whether or not they try to terminate the contract. Paying too much is certainly not a nonperformance condition (when one party does not fulfill the contract).

Answer 2

the owner, he told me he was cancelling my contract, can he do that without providing a reason?

It depends on how long ago the contract was entered. The clause entitles either party to suspend it (and, impliedly, bring to an end to it) anytime upon the expiration of the initial period of one year ("shall continue thereafter until suspended by either part"). Note that the clause does not require a reason for severing the contract in that case.

Other than that, the provider certainly would need reasonable grounds for the cancellation itself to be lawful. If cancellation happened during the initial period of one year, the refusal [to state a reason] viewed in isolation tends to weaken the presumption of good faith that is requisite under contract law. But the issue of whether cancellation itself is lawful during the first year would depend on the particular facts of the situation.

is he able to not provide me with a refund for services not rendered?

The provider has the obligation to give you the refund that is consistent the contract, or --absent a provable clause addressing the matter-- in accordance with the services provided hitherto.

The provider's entitlement to cancel the contract does not extend to an entitlement to retain the excess of payment(s).