We often see our clients engage in various contracts like internet optimization with out of state vendors. Technology has made it easy to conduct business remotely, allowing clients to shop around and find good deals and rates for products and services. It is so easy to trust when, over the phone or the internet, company representatives seem honest and ethical. Unfortunately, that isn’t always the case.
It is important to look at the contracts before you sign them, and especially if it is a contract either for a significant period of time or a significant amount of money. Our office can review these contracts for what we refer to as “unconscionable” terms, those terms that even in the best situation should not be included in a contract as they would create unfavorable results for you. For example, a contract could have a renewal provision in it that requires you to submit notice of non-renewal of the contract prior to the expiration of the contract. This is not unusual and typically is in writing and within a specific amount of time, possibly for 30, 60 or even 90 days prior to the expiration of the contract. What is unusual and will prove to be difficult later, and which we have seen before, is that even though all of the correspondence with a company is either by fax or e-mail, the contract specifically excludes using e-mail or fax transmission to terminate the contract, and in addition, it requires that the client first obtain from the company the “official termination form.” Easy solution, right? Request the form, return it in the timeline of the contract, and it’s over. But what if you request the form and never receive it? You want out of your contract and keep trying to tell them, but the company is not responding and continuing to bill you, charging your credit card, deducting payment from your bank account, or sending you to collections. Now what?
You might think that this would not be that difficult to deal with and that we would just file a lawsuit if the company continued to charge you or to try to collect. Again, easy solution, right? Review your contract again… we have seen in contracts a provision called “selection of forum,” which means that in the event that a lawsuit would be filed it is required to be filed in the jurisdiction set forth in the contract, which isn’t necessarily where you are. It could be in any state and any county that the company choses. This means in order to file a lawsuit against this company you must hire counsel in the state predetermined by the contract. The contract was likely written like this to make it extremely difficult for individuals to terminate the contract by failing to provide the “official termination form” and also by making it extremely costly to litigate thereby resulting in the client being extorted into paying the remaining fee which has a potential to be several thousand dollars.
We advise you to contact our office before you enter into any contract. The vendor contracts that you enter into for things like IT or internet optimization, may seem trivial and unnecessary to have a legal review but the amount of money that you may spend for us to review the contract will in many cases result in substantial savings based on what you might lose if you find yourself in a similar situation. The attorneys at Thomas Law Group are extremely experienced at reviewing contracts of all types and can suggest what changes to the contract should be made. It will be a red flag if we attempt to make changes to the contract and find out that the vendor is unwilling to make those changes. We generally suggest that you enter into contracts with local vendors instead of national vendors who may be nothing more than an email address, a mail box drop and one person with what appears to be a legitimate address and business. Often times you don’t find that out until it is too late.