I signed a contract to rent a booth in a salon for 1 year but I then found out that the salon does not have a valid business license, is my contract null void?

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I signed a contract to rent a booth in a salon for 1 year but I then found out that the salon does not have a valid business license, is my contract null void?

The contract was signed 2 months ago and I just found out that their salon license expired at the end about 6 months ago.

Asked on February 1, 2017 under Business Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Your contract is null and void IF the lack of a license actually impacts you: e.g. the salon is shut down or shuttered or operations suspended and so you cannot work, etc. Or if the lack of a license exposes you personally to liabilty (e.g. you could be fined). Then you could terminate the contract under a variety of theories, including illegality and breach of contract. But if the lack of a license has no effect on you or your operations--for example, all it does is potentially expose them, not you, to fines--then it does not affect the agreement.


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