Legal Question in Business Law in California

If I offer a service and charge customers a set monthly fee and have no clause in my contract to increase the fee (unless, I guess, by writing to the customers and getting their consent to do so) am I permitted to increase my fees?

Although I will be selling my product primarily in the US (and the UK) my question comes as a result of reading about the Retail Price Index in the UK where it seems as if it is 'reasonable' to increase fees by up to 3.5% per year in keeping in with inflation.

I'm trying to find out whether this is indeed the case in the UK and whether the equivalent exists in the US. I want to increase my prices but if i go out to my customers and ask their permission to charge more to their credit card I'll get pushback. I want to offer them more value first and then increase my prices by around 3% and justify the increase off the back of inflation, if that is permissible.

Thanks!


Asked on 1/20/13, 7:16 am

1 Answer from Attorneys
Robert Kubler The Kubler Law Firm

" I guess, by writing to the customers and getting their consent to do so"

You guessed right but firstly you need a contract term. Probably make it month to month because the payments are month to month. Then give the customer notice of the cost increase and the chance to cancel the contract before the price increase. Also the contract should be drafted to give notice of this so customers aren't surprised to learn of the increasing prices after a year.

The other advice you seek is a business decision, not a legal one. For your reference in America we have the CPI index and officially inflation is very low. In fact its deflationary (prices going lower) in some areas.

If you need a contract drafted, and for a fixed cost, just contact me.

Read more
Answered on 1/20/13, 12:01 pm


Related Questions & Answers

More Business Law questions and answers in California