Legal Question in Business Law in California

Re: written and verbal contract

On the whole, I'm pretty doubtful that you're going to be a winner here.

With rare exceptions, a court will look at the black-and-white within the "four corners" of the written agreement to determine its terms and proper interpretation, and only use so-called parol or extrinsic evidence if some part of the written contract is ambiguous and the extrinsic evidence helps explain the writing.

The first thing a judge will look at is whether this is a 12-month contract with so-called automatic renewals or a ten or 5+5 or whatever. Automatic renewals are not the same as assured renewals! An "automatic" renewal is NOT guaranteed; it's marely a renewal that takes place without the intervention of a party to cause it, so that if the parties file the contract and forget about it, it will go on renewing.

On the other hand, contracts that renew automatically almost invariably have termination provisions. That's what makes the difference between a contract that renews every year for 10 years and a ten-year contract. They are not the same.

My guess is that your contract contains a provision whereby either party can terminate the contract upon X days' prior notice to the other. The termination right may be exercisable, with such notice, at any time of the year, or perhaps only at a certain point prior to the annual automatic renewal date.

The fact that you paid $5K upon signing adds an addition wrinkle. Is the payment mentioned in the contract? Did you pay it in cash? To whom was the chack payable? If the money went to the wrong hands, it could be looked at as an illegal bribe. If it was properly paid to a proper recipient, however, especially if it is mentioned in the contract, this might give you a lever to get a judge to consider your outside-the-written contract evidence and argument that you're entitled to a longer deal.

Still, I think you are unlikely to prevail on this one, but wouldn't rule it out without an opportunity to study the contract.