Legal Question in Business Law in California

Automatic Contract Renewal

Are contracts with an automatic renewal clause binding if the clause is not in bold or in a larger font?

Asked on 3/29/02, 4:30 pm

2 Answers from Attorneys

Re: Automatic Contract Renewal

What type of contract?

D. Alexander Floum, Esq.

The Schinner Law Group

[email protected]

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Answered on 3/29/02, 4:43 pm

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Automatic Contract Renewal

In general, no, larger type is not required. However, many exceptions to general contract law are provided by various consumer-protection statutes.

The Civil Code makes 'unconscionable' contracts unenforceable (section 1670.5) at the discretion of the court, but exercising such a right would seem to require a lawsuit to place the matter before a judge. "Unconscionable" means that a contract or a provision thereof is shocking to the conscience, and may include tough provisions inserted in what the non-drafting party thinks is just fine-print boilerplate. However, winning these cases isn't a slam dunk because parties to contracts are supposed to read them before signing.

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Answered on 3/29/02, 6:41 pm

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