Legal Question in Business Law in California

I signed a year contract for my business on 2/11/03 with Waste Management for trash pickup service at $70.XX per month. The contract signed states that the agreement is renewed each year and it is implied that when receiving an invoice, if it is paid, you are agreeing to the increase and new term unless giving 60 days written notice at that specific time. The amount has increased to $130.00 per month, and in the middle of the "term" they have added an additional $3.00 to the bill for not agreeing to having payments made automatically from a checking account or making online payments. Am I held to this agreement and are they allowed to charge me 5 times the amount of payment as a penalty for cancelling service at this time when they are making a change to the agreement?


Asked on 8/31/09, 8:11 pm

1 Answer from Attorneys
John Gibson

I'd have to review the agreement and get a better idea of the facts to say for sure (specifically, it's not clear how the "5 times the amount of payment" comes into play). This sounds like a liquidated damages clause. If that's the case, the best argument you can make is that it is a penalty (which is unenforceable) and not damages that seek to compensate the injured party. Keep in mind though that this is a difficult argument to make.

Bottom line, all of the things they are trying to do should have been included in the agreement you signed. Carefully review that agreement. If they have objectively satisfied their obligations there's probably not much you can do (except for arguing the liquidated damages clause is unenforceable, as discussed above).

Feel free to contact me directly if you need any further help on this.

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Answered on 8/31/09, 8:42 pm


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