If I am in a service contract and terminate the contract early, do I have to pay the termination penalty fee immediately?

Asked on August 21, 2014 under Business Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

If the contract specified a time frame for paying the termination fee, you must pay it within that time period.  If no period is specified, there is no hard-and-fast rule: typically, you'd be expected to pay it within the normal industry guidelines for that industry--or, if applicable, the guideliness for how you paid other bills under this contract--for payments of any amounts due and owing. For example, if amounts due under the service contract were generally to be paid within, say, 30 days of invoicing, you'd most likely have to pay the termination fee within 30 days of termination.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.