A contract term is the period of time over which a contract applies. A minimum contract term is the shortest contract term available for a given contract. If you sign a contract which has a minimum contract term, you will not be able to terminate the contract without being penalized until the minimum contract term is over.
Many contracts in Switzerland include minimum contract terms. Minimum contract terms are widely used in telecom contracts. Other contract terms may be offered in addition the minimum term, but the minimum term is the shortest term available.
It is common for contracts to be automatically renewed at the end of the contract term if not cancelled by the customer by the due date. Typically, a notice period must be adhered to by customers looking to terminate a contract.
While it is generally possible to terminate a contract before then end of its term, doing so normally incurs penalty fees. As a general rule, the use of minimum contract terms by merchants is not consumer friendly.
Telecom plans offered by Swiss telecom service providers commonly have minimum contract terms of 12 or 24 months. Prepaid offers, on the other hand, do not generally have fixed terms. Mobile plans which do not have minimum contract terms are offered by some Swiss mobile service providers.
In the past, Swiss telecom contracts were extended by 1 full year if they were not cancelled before the minimum contract term expired. This is no longer the case.
It is important to pay attention to minimum contract terms before entering into a contract with a telecom or financial service provider. Ideally, you should stick to contracts which either have short minimum contract terms or no minimum terms at all. This helps you avoid having to terminate contracts prematurely if you no longer need them or if you find better offers. Terminating contracts ahead of schedule can be expensive. For example, the penalty fees charged by Swiss telecom service providers for early contract termination can be as high as thousands of Swiss francs.
The info pages corresponding to mobile offers included in the interactive mobile plan comparison clearly state whether or not an offer has a minimum contract term, and if so, what the minimum contract term is.