Legal Question in Business Law in California

Is the evergreen clause illegal in california? We signed a contract in 2003 for 3 years then the contract said it will renew itself every year. It has been 4 years now and we want to discontinue using this company, they tell us they just renewed it in May 2010 and we didn't know, they never have asked us to renew. Is it right for them to charge us for the remaining year up to may 2011 if we want to cancel? This is for my job not personal.


Asked on 6/21/10, 8:43 pm

3 Answers from Attorneys

Generally automatic renewals are perfectly legal in California. There are exceptions to enforceability, but they would depend on the nature of the contract and the facts and circumstances when it was entered into.

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Answered on 6/21/10, 11:51 pm
Kevin B. Murphy Franchise Foundations, APC

The other attorney is right on point here. Consult with an attorney in your area for specifics.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

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Answered on 6/22/10, 7:47 am
John R. Browning, Esq. [email protected] (949 234-6266)

Correct, and review the contract carefully, as there may be other ways to get out of the contract.

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Answered on 6/23/10, 11:36 am


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