Asked in Consumer Law and Contracts for California

Q: Can a Californian company renew the contract term even consumer has indicated intention to cancel?

Company A has entered into a contract with Company B, a provider of data analytic services having its address in California, which includes the following automatic renewal clause:

“The term of this Agreement shall commence as of August 1, 2018 and shall continue until April 30, 2019.

At the end of the Initial Term, the Agreement and this accompanying SOW2 will automatically renew for additional twelve (12) month terms unless either party provides sixty (60) day written notice to terminate.”

Company A has indicated its intention not to renew on April 18, 2019, unfortunately, not in compliance with the 60-day notice period.

Company B responded by saying that the agreement has been renewed through April 30, 2020 and insisted on payment for the full term.

Does Company B have the right to do so?

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1 Lawyer Answer
Bruce Alexander Minnick
Bruce Alexander Minnick

A: this a question taken from a first year law school contracts class test? If so, the answer is "maybe."

Hint: Commercial contracts are NOT the same a "consumer" contracts.

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