Legal Question in Business Law in California
I am a small business in California. I entered a 12 month service agreement with an interent marketing company to provide SEO services (to be found all over the internet). The company automatically withdraws form my bank account on a monthly basis. At the time I signed the agreement, the sales rep did NOT state that it automatically renews. I found this out when my online checking notified me this month (being the 13th month). I called the company and they said that on the contract it does state that unless I notify them within 30 days of the end on the 12 th month thay will renew me for a full year unless at this point a written notification is now a 90 day reuirememnt. Second, (this part is not sour grapes or buyer's remorse) my company has a near zero presence online as I am not "found" on Google, Yahoo or Bing, rather, only on two obscure out of state online private business directories. I would simply like to cancel without giving into their unfair demands. What is the law in this regard? Your reply is most appreciated. Thank you.
3 Answers from Attorneys
A contract does not automatically renew. It is essentially a new contract which your acceptance is required, and your inaction in cancelling does not constitute an acceptance. After the term ended the contract ended and you have per your monthly payments a month to month informal agreement. Give 30 days notice.
About their poor performance you ought to see what they promised to do for you in the contract. In my opinion SEO "services" are a joke and is the latest gimmick web related companies use. If they didn't even have access to your website you bought next to nothing other than having someone someone submit your website url to a directory. SEO services from a webhosting company usually offer to edit your website's data tags, snippets, robot files, etc. which is what this company should have done. In my opinion that it like using a bucket to empty the ocean, it ain't going to do anything. You ought to have your webmaster look into Google Adwords.
Check the contract for what they promised and see what they actually did. If they didn't do what they promised then just take them to small claims court if the amount is under 10K.
It sounds like you have two issues: (1) a termination of the contract; and (2) a failure of the SEO company to deliver services.
I would need to review the contract documents and speak with you personally to get a feel of the enforceability of any automatic renewal provision, and to get a feel for any claim of breach by the SEO provider. Indeed, it may be that you have a claim for misrepresentation against this company, based on things the sales rep did and did not say. It may be that you should issue a demand letter for the termination of the contract and/or recovery of amounts already paid.
Small claims court is an option if the amount in question is less than $10,000.
This differs somewhat from the above. Automatic renewal clauses are valid in California with some conditions. An automatic renewal clause allows an agreement to continue for a defined period if the existing agreement isn't terminated (or renegotiated) within a specified time of the expiration of the current contract. The term of renewal depends on the specific contract language, but generally is for the same period. However, California requires that automatic renewal provisions must be in plain, clear English and in at least 8 point bold faced font to be enforceable. If this is not the case, then send a certified letter to the same effect, and that you are terminating the contract. If this is the case, negotiate the best termination settlement you can, and get it in writing.
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