Legal Question in Business Law in California
This is more of a curiosity question: Does a company have to refund unused time? For instance, a monthly service fee which I cancel mid-month.
2 Answers from Attorneys
Depends upon the contract that is signed and thus controls refunds. If a facility is provided for you use, such as a gym, the argument would be that they have continued to provide the facility but you decided not to use it, so no refund. If a direct personal service is provided, such as haircuts, you might be entitled to a refund as the person has not had to expend the labor involved.
This is a matter of private contract. If the contract is silent on this subject, a judge would have to figure out from other clues what the parties had in mind at the time of contracting. In some businesses I'm familiar with, unused service time is not refundable at all. "Use it or lose it" is the rule in many computer-service contracts at the industrial level, for example, except that if the customer signs up for another year, unused time can be carried forward. However, it's all in the written contract.
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