Legal Question in Business Law in California

Yes, I have a commercial cleaning service and every customer has a one year contract. In the contract in terms of agreement it states that the contract will automatically be extended and renewed on each anniversary date on the same terms and conditions, unless one parties shall give written notice of termination at least (30) days prior to such anniversary date. I have a customer since 2012 that canceled on me 5 months early , and he said that this evergreen provision are non binding and uneforceable in California, is this true and what are my obtions.


Asked on 5/31/14, 12:03 pm

1 Answer from Attorneys
Carl Starrett Law Offices of Carl H. Starrett II

There is no law in California that makes automatic renewal clauses illegal in commercial contractors. If the renewal clause is clearly written and the contract is not for an illegal matter, the clause should be enforceable. You should be able to take your customer court and seek damages for breach of contractor.

Now the decision of whether or not to sue and calculating the damages a different story. Let's say your contract is for $600 per month and it was cancelled 5 months early. You don't necessarily get the full $3000. Instead, you will likely get the lost profit on that contract. You won't incur the expenses of performing the contract like paying employees and supplies.

If you cannot negotiate a settlement, you can always file a lawsuit. Many attorneys will provide a free consultation on new matters.

Read more
Answered on 6/01/14, 6:52 am


Related Questions & Answers

More Business Law questions and answers in California