Legal Question in Business Law in California

Cancellation of Advertising Contract

I own a small business and hired a radio station to advertise. We had a 4 month contract with them for $12k. After 3 months, the ads weren�t working so we decided to cancel 3 weeks prior to the last air date. In the contract, there is NO non-cancellation clause. It doesn�t say anything about us not being able to cancel anywhere on the contract. They are saying that the rate I got was based on a special price because of the length of the commitment. Therefore, I have already received the benefits of the discounts from the 1st 3months, and I owe them money for the 4th month because they will air the ad with or without my consent or money. We paid month to month. They refuse to let me cancel. They plan on airing the last month without my consent or money and they said they will put me in collections. The collections will be against their my personal credit.

My questions are: Do I have the right to cancel this contract? Does the radio station have the right to run the ad and then put me in collections for the balance?


Asked on 11/20/07, 3:56 pm

2 Answers from Attorneys
Edward Hoffman Law Offices of Edward A. Hoffman

Re: Cancellation of Advertising Contract

Without knowing what your contract says, there is no way to give you a reliable answer. Barring something unsual in the contract, you probably are not entitled to a refund but you probably can insist that the station stop running the ad.

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Answered on 11/20/07, 6:57 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Cancellation of Advertising Contract

I'd have to say you probably can't cancel. Contracts are not required or expected to contain "non-cancellation clauses." A contract is an agreement between the parties. If it says you will advertise for four months, then you must advertise for four months. If the parties intended either to have the privilege of earlier termination, that would have to be mentioned in the contract terms.

This isn't to say contracts cannot be terminated early, for cause. A breach by one party generally excuses further performance by the other, for example.

On the other hand, in general, when a party contractually agrees to do something for a specified period of time, and it fails to do so, that is a breach. Take, for example, a house painter given $1,000 to paint four rooms. He can't stop after doing three without being in breach. Or if you buy a car and promise to pay for it over for years, you can't stop making payments after three years. If you lease your rental unit for four months, you can't evict the tenant after three; and on and on.

Now, the question of damages is another matter! If the radio station can re-sell the spots to another advertiser at the same price, or for more, it might not be entitled to a dime of damages.

Further, I think as an aspect of mitigating its damages, the radio station must "pull" your ads and try to fill the gaps with other paid ads. Failure to mitigate damages in reasonable ways will reduce the damages the non-breaching party can claim from the breaching party.

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Answered on 11/20/07, 7:02 pm


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