How Do I Cancel a Waste Management Contract?

Aaron Stahl / Waste Management / December 29, 2022

Are you feeling the strain of being caught in an expensive and complex waste management contract?

You’re not alone — many businesses, large and small, face obstacles trying to get out of contracts they consider too costly or needlessly complicated. They’ve watched the bills get higher and higher each month without explanation. They’ve tried to cancel their contracts and have been met with a denial by Waste Management, claiming the contract agreements and expensive cancellation fees.

Fortunately, there are several key steps one can take to get out of these kinds of agreements. However, due to the complicated and unfair terms in garbage hauling contracts, this can be complicated for the average business owner.

If you’re trying to cancel or get out of your Waste Management contract, you’ve come to the right place.

About Waste Management

We know you’ve seen the big green and yellow Waste Management vehicles and dumpsters around. Waste Management, Inc. is the largest waste management company in the country. Their services range from residential and business waste pick-up to roll-off dumpster rental, waste compactors, electronic recycling, portable toilets, and more.

Waste Management services nearly 21 million residential, industrial, municipal, and commercial customers in the US, Canada, and Puerto Rico. Their network includes an impressive 26,000 vehicles, plus hundreds of transfer stations, landfill disposal sites, and recycling plants. With nearly $18 Billion in revenue, they’ve secured rank 203 on the Fortune 500 List of Companies in 2022.

Things to Know About Your Waste Management Contract

Across the US, Waste Management is often the number one, if not the only, option for businesses regarding waste disposal contracts. Because of that, they have a massive advantage when it comes to negotiating contract terms with businesses. Waste Management reps know what they’re doing when it comes to creating the conditions of contracts. As a result, organizations end up paying ever-increasing prices with no way to get out.

Here are some essential things to know about your Waste Management service agreement.

Adhesion Contracts

Most contracts with Waste Management are adhesion contracts. An adhesion contract is when one party has all the power during negotiations and, therefore, has the advantage of setting all the terms and conditions in favor of them. Unfortunately, adhesion contracts put all the risk on the buyer (that’s you) and result in unfair terms.

Because Waste Management knows that many organizations have no choice but to use them for waste removal services, they’re not willing to negotiate terms. Often, business owners don’t fully understand the ramifications of the terms they agree to.

No Standard Pricing

On top of unfair negotiation tactics, or lack of negotiation altogether, Waste Management doesn’t have transparent or standard pricing. Sales reps will make higher commissions the more they get your business to pay for services, so that is their number one goal.

Consensual Price Increases

In what is quite possibly the greatest misnomer in the history of waste management contracts, nearly all Waste Management contracts are subject to consensual price increases. Waste Management includes specific clauses in their garbage hauling contracts that state that they can raise the price of their services each year without prior notice of approval.

The contracts usually include a list of potential reasons to raise prices, typically things that are out of the company’s control, such as landfill price increases or government fees. But they also usually include a clause that states they can raise prices for any other reason.

While Waste Management is required to inform businesses about these price raises in writing, they do so by putting the new pricing in your invoice. Once an organization pays the new prices, they are locked in. It can be difficult to notice these higher prices on one invoice because monthly costs fluctuate.

Automatic Renewal

Waste Management also includes automatic renewal clauses in their waste management service agreement. Regardless of what the agreed-upon initial term is, typically between 12 and 60 months, the contract automatically renews at the end of each term.

While there are expensive penalties for trying to leave Waste Management contracts, you can’t simply wait for them to expire either. To terminate at the end of your initial contract term, you must send a written cancellation letter at least 90 days before, but not more than 180 days before the end of the contract. If you miss this window, your contract will be automatically renewed. This is also known as an evergreen contract, and it plays to the service provider’s advantage.

Getting Out of a Waste Management Contract

Despite the odds being ever in their favor, there are ways to cancel your Waste Management garbage contract. However, it takes careful planning and potentially some help from a waste management services expert. Here are a few ways you can succeed in a Waste Management contract cancellation.

1. Cancellation Letter

While this should be a straightforward process, your Waste Management contract will likely have strict requirements on how to give official notice that you would like to end the service agreement.

Waste Management typically requires that you deliver written notice between 90 and 180 days before the end of your current contract. The contract typically states that if the cancellation letter is not received within this time frame, it will be considered ineffective. Make sure to check your agreement for any other specifications.

2. Breach of Contract

The only way a Waste Management customer can terminate the contract early without penalty is if the company breaches the contract. If Waste Management fails to satisfy the Service Guarantee, the customer has the right to terminate the contract. If this happens, the customer is not required to pay liquidated damages.

3. Consensual Price Increases

Customers can also terminate the contract if they do not agree to a consensual price increase. However, the catch here is that you must notify Waste Management no later than 30 days after they notified you of the price increase. If you don’t cancel within that time frame, your lack of action will be construed as an acknowledgment of the price increase. (note: Many older Waste Management contracts have different language in the terms and conditions, so your contract may vary.)

4. Early Termination Fee

If you wish to terminate the contract but don’t have the grounds to do so through contract expiration, breach of contract, or consensual price increases, you may still cancel your contract. However, you will be required to pay Waste Management liquidated damages as well as the company’s legal fees. If you have more than six months left on your contract, this fee typically equates to paying six times your average monthly bill. If there are less than six months, it would be the most recent monthly charge multiplied by the number of months left on your contract.

5. Seek Expert Help

If you’re not sure about the specifics of your waste disposal contract or whether or not you’re able to cancel it without penalties, seeking help from a company like P3 Cost Analysts is a great way to get some expert help. We can help you determine the right time to cancel your garbage contract. Alternatively, we can help you renegotiate your contract with Waste Management to have more favorable terms and conditions.

Finding a Better Waste Disposal Contract

If you’re lucky, your geographical area may be serviced by other, smaller waste hauling and recycling companies. Other companies are more likely to negotiate with business owners and agree upon more favorable terms that work for both parties. Don’t be afraid to give Waste Management competitors your business. They often have just as many service offerings and high customer satisfaction ratings.

Regardless of which company you choose, you need to carefully consider the same contract conditions and make sure you’re not getting locked into a one-sided contract. P3 Cost Analysts can help you shop around for the best waste management services provider and help negotiate your new contract.

The Bottom Line on Waste Management Contracts

It’s never a good idea to enter into a contract that heavily favors one party over the other — especially if you’re the one getting the short end of the stick. Unfortunately, agreements with Waste Management do tend to be adhesion contracts.

The most important step to protecting yourself when it comes to Waste Management contract cancellation is to enlist the help of an expert before you enter into these binding agreements. However, if you feel like you’re stuck with a trash contract with Waste Management, you do have options to cancel it.

If you’re in doubt at any stage of a waste management contract, reach out to P3 Cost Analysts’ waste auditors. We can help you potentially cancel your Waste Management contract, as well as audit your current invoicing, evaluate the cost-effectiveness of your contracts, recognize overcharges, and help you implement better contract conditions.

To start saving money on waste management services, schedule a free expense audit with P3 today!

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