Legal Question in Business Law in California
Automatic Contract Renewal
Are contracts with an automatic renewal clause binding if the clause is not in bold or in a larger font?
2 Answers from Attorneys
Re: Automatic Contract Renewal
What type of contract?
D. Alexander Floum, Esq.
The Schinner Law Group
www.schinner.com
Re: Automatic Contract Renewal
In general, no, larger type is not required. However, many exceptions to general contract law are provided by various consumer-protection statutes.
The Civil Code makes 'unconscionable' contracts unenforceable (section 1670.5) at the discretion of the court, but exercising such a right would seem to require a lawsuit to place the matter before a judge. "Unconscionable" means that a contract or a provision thereof is shocking to the conscience, and may include tough provisions inserted in what the non-drafting party thinks is just fine-print boilerplate. However, winning these cases isn't a slam dunk because parties to contracts are supposed to read them before signing.
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