Legal Question in Business Law in California

Equipment rental contract

A 5-yr contract to rent 1 washer & dryer was entered in Mar 1995. On Nov 2000, a letter was mailed to cancel and not to renew was mailed, but the contract stipulated that notice was to be sent certified mail otherwise it will automatically renew for an additional 10-yr term. The original 5-yr contract also stipulated an additional annual increase of 2.5% will be added to the monthly rental amt which had not been previously imposed or collected by the rental co. during the 5-yr term. Realizing their mistake, the rental co. is retroactively charging the 2.5% increase each month to ''catch up'' on their oversight. Hasn't the original contract ended or are we still liable to pay for their oversight/mistake? Also, if the 5-yr contract has ended then doesn't this mean they have changed the terms and conditions of the contract, therefore the 10-yr contract is no longer enforceable?


Asked on 6/26/01, 9:01 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Equipment rental contract

Well, considering the dollar amounts probably involved, this case would be in small claims instead of regular court, and small-claims judges tend to see that justice is done rather than hewing strictly to the letter of the law or strict terms of the contract. For example, failure to use certified mail might be held unimportant if notice was in fact given and received. The small claims court will interpret the contract and your rights so as to make things fair all around. What some small-claims litigants are unable to understand, however, is that the other guy's position has merit also.

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Answered on 7/02/01, 6:27 pm


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