Thank you for your patience.
Yes, this is a breach of contract situation. Under California (and really, all of US) law, once a contract is inked, signed, or agreed to, the terms control unless they are impossible, improbable, or extremely difficult to perform, or if the parties later agree to modify the terms on their own. In this situation once they agreed to terms, they had to run your advertisement for the period agreed to, even if they made the mistake. You were not under any obligation to pay more, as the mistake was "unilateral"--that is, one sided, and not intentional. That is, if there was a mistake at all.
Second, you may also have a cause of action
against the other party who you think may be trying to ruin your business
. California has a civil violation called a Intentional Interference with Prospective Economic Advantage. This is how it is defined under CA law:
The elements of that tort of are: '(1) an economic relationship between [the plaintiff and some third person] containing the probability of future economic benefit to the [plaintiff], (2) knowledge by the defendant of the existence of the relationship, (3) intentional acts on the part of the defendant designed to disrupt the relationship, (4) actual disruption of the relationship, [and] (5) damages to the plaintiff proximately caused by the acts of the defendant.' (Buckaloo v. Johnson (1975) 14 Cal.3d 815, 827.)
In this situation, if you can prove it, you can sue the other party for damages that you incured based on the fact that you were forced to cancel your advertising.
Hope that helps.
Edited by Dimitry Alexander Kaplun on 9/2/2010 at 6:46 AM EST