Legal Question in Business Law in California

Re: Contract Cancellation after term expires

What does the contract say as to successors in interest? Has your company continued to deal with their new company and contact as if it were the same, prior entity?

Please feel free to email me directly with your answer, as this board is an open discussion forum. I can be reached at the contact information provided here at LawGuru, or through our firm's site at RulesOfEmployment.com.

Scott

Re: Contract Cancellation after term expires

Most contracts with successive automatic renewal provisions also have means written into them to prevent the automatic renewal, such as by giving notice of intent not to renew a certain number of weeks or months before the renewal is due to occur. Otherwise, it wouldn't be a five-year contract with an automatic renewal for another five years; it would be a ten-year contract. You need to read the contract thoroughly and carefully, looking for such a provision. It's probably there although not necessarily.

As to whether departure of signatories has any effect on the validity of the contract, I'd say that very likely makes no difference, unless the contract could be interpreted to require the personal presence or performance of or by that individual. People sign business contracts on behalf of the organization, and even a change in the name or makeup of the organization or assignment of the contract to another organization does not invalidate its contracts. There are exceptions, as noted. For example, if I contract with Picasso to paint my portrait, he breaches the contract when he assigns it to Rubens or Goya. On the other hand, if I contract with Jones, Inc. to paint my house, Jones can probably sub it out to Smith, Inc. or Smith & Jones Painting Partnership without being in breach. Jones, Inc. can also merge with Williams, Inc. forming J&W House Painting, Inc. without the contract being breached. The new entity or assignee still has to paint my house and I still have to pay the agreed price when the work is done per the old contract.

Re: Contract Cancellation after term expires

While it sounds like it is an out of date agreement, you'd be quite unwise to base your decision on an anonymous web response. This needs at least a quick review of the documents and facts. The wrong decision could be quite costly in legal fees if someone sued you. Feel free to contact me if interested.

Re: Contract Cancellation after term expires

Automatic renewal clauses are valid in some instances. There are certain requirements under the code. We would have to review your contract. Did the service provider breach the contract?