Wayport, Inc. v. Tage Inn Corporation
Wayport, a provider of high speed internet services to hotels and airports, contracted with Tage Inn to provide services to Tage's hotels in MA. The contract lasted for five years and contained a provision that if it was not cancelled in writing by a particular date prior to its original expiration date then it would automatically renew for two more years. Tage gave a notice of termination but it was a month late. Wayport notified Tage that the contract had automatically renewed for two more years and therefore if Tage chose to terminate it was obligated to pay damages for the remainder of the contract term. Tage contended that notification a month late did not prejudice Wayport and it refused to pay anything. It sold its hotels to La Quinta for $26 milion and dissolved.
