the more I'm reading about SIM cards I also think they might through some "custom" SIM our way... meaning that the physical shape of the card will only work with those issued by AT&T.
What states could those be? Please get back with an answer after you do some research.
Just a speculation, states have some pretty weird laws on the books. Montana comes to mind, however I'm not pressing the point. $175 is way better than being on the hook for the whole thing.
A contract is a contract. If you sign it, even if it is a contract of adhesion or you don't read it, you are bound by its terms. If you don't like the terms, don't sign/buy the phone. Caveat emptor.
Putting aside whether this would be a good or bad policy, it's not how the law works in any jurisdiction in the U.S. that I'm aware of.
Really? Then you should be able to provide ample, specific examples rather than generalizations. Please name the jurisdictions and provide the appropriate case law.
Quote:
Originally Posted by SMN
The $175 cancellation fee is a liquidated damages clause which, since it isn't justified here by a subsidy on the phone, runs a very substantial chance of being deemed an unenforceable penalty clause
The validity of this depends on whether the cancellation fee is a liquidated damages clause that is tied to the price of the phone. First, the fee could be imposed for simply breaching the contract, period. The contract itself could provide for such a fee regardless of whether or not the fee is justified because the phone is not being subsidized. These are some of the policy questions you alluded to. Second, the fee could be for breaking the two year service contract, not to recoup costs from any phone subsidy.
Quote:
Originally Posted by SMN
(As far as contracts of adhesion go, you're quite wrong on that as well - they get less judicial deference almost everywhere, but the specifics of how that works is a hotly contested issue in the law right now - but here that will just be subsumed as one of the several factors in the liquidated damages analysis.)
Less juducial deferrance does not make contracts of adhesion unenforceable. How how am I quite wrong exactly? Contracts of adhesion are enforceable and are a necessity in a capitalist society (policy argument). Read Carnival Cruise Lines. If a jurisdiction clause on the back of a cruise ship ticket is enforceable, why wouldn't this fee be?
Really? Then you should be able to provide ample, specific examples rather than generalizations. Please name the jurisdictions and provide the appropriate case law.
Run a Westlaw search in the ALLSTATES database for:
Here's a list of authorities from state supreme courts. Every single one of them says that liquidated damages clauses are unenforceable if they represent a penalty rather than a reasonable measure of actual damages:
Quote:
1. H Olsen v. T.A. Tyre General Contractor, Inc., 907 A.2d 146, 2006 WL
2661140, Unpublished Disposition, Del.Supr., August 24, 2006
2. Wisconsin Auto Title Loans, Inc. v. Jones, 290 Wis.2d 514, 714 N.W.2d
155, 2006 WL 1419645, 2006 WI 53, , Wis., May 25, 2006
3. H Delaware Bay Surgical Services, P.C. v. Swier, 900 A.2d 646, 2006 WL
1419394, 24 IER Cases 1239, , Del.Supr., May 22, 2006
4. H Bates Advertising USA, Inc. v. 498 Seventh, LLC, 7 N.Y.3d 115, 850
Oh, that's right. I can get an iPhone with AT&T, AT&T, or even AT&T. I like those choices.
Quote:
Originally Posted by Neruda
AT&T is forcing people to sign contracts?
If they're going to buy an iPhone, yeah.
Quote:
Originally Posted by Neruda
There is a choice here.
Commit to AT&T for two years or don't buy an iPhone at all. Nice choices.
Quote:
Originally Posted by Neruda
If you don't like the terms, don't buy it. No one is forcing anyone to do anything.
As you might have figured out by my previous comments, I balk at those who say I have a "choice."
The fact of the matter is: If I want an iPhone there's only ONE way to get it. I have to get a 2-year service contract at whatever rates they decide to charge and if I don't like the service I get to pay $175 to back out.
The validity of this depends on whether the cancellation fee is a liquidated damages clause that is tied to the price of the phone. First, the fee could be imposed for simply breaching the contract, period. The contract itself could provide for such a fee regardless of whether or not the fee is justified because the phone is not being subsidized. These are some of the policy questions you alluded to. Second, the fee could be for breaking the two year service contract, not to recoup costs from any phone subsidy.
Nope, my point was that this is precisely what is NOT permitted. A contract provision that provides for a specific penalty in the event of a breach is known as a liquidated damage clause. Liquidated damage clauses are only enforceable if (a) it would be very difficult or costly for a court to ascertain what the actual amount of damages caused by the breach is (as measured by the difference between where the non-breacher would be had the contract been fully performed and where the non-breacher actually is as a result of the breach), and (b) the amount in the liquidated damages clause constitutes a reasonable estimate of what the actual damages might be.
A fee "imposed simply for breaching the contract" - that is, one that isn't to compensate the non-breacher for actual damages (or a reasonable measure thereof), but rather intended solely to penalize the party for breaching the contract - is unenforceable. (There are very good policy justifications for this, but I'm not going to get into them here.) Such a penalty clause is unenforceable, as per the cases I listed.
The validity of this depends on whether the cancellation fee is a liquidated damages clause that is tied to the price of the phone. First, the fee could be imposed for simply breaching the contract, period. The contract itself could provide for such a fee regardless of whether or not the fee is justified because the phone is not being subsidized. These are some of the policy questions you alluded to. Second, the fee could be for breaking the two year service contract, not to recoup costs from any phone subsidy.
Yes, but doesn't it (as some on this thread have touched upon already) seem highly likely that the fact that you are paying full price for the iPhone, suggest that the phone company will not need to charge so much per month for voice and/or data plans. And, if they do supply a 'reduced cost' (one might say 'subsidised') monthly fee relative to voice and data plans for subsidised phones, they will expect recompense for breach of that contract and the loss of their income both in the future and up to the point of cancellation compared with more expensive voice/data plans.
Overall, I'd see this cancellation fee is great news as it entirely fits with the prospect of reduced cost of voice or data (or both).
That's just great. If this is a liquidated damages clause with an unenforceable penalty. I gave you reasons why it is not, so you're case law is not controlling. Any cases on point? Involving cell phone contracts? Don't think so, but I'm looking forward to another list of cases.
Oh, and I highly doubt that you read these cases before you send them to me. You wouldn't do that when writing a brief and presenting cases as legal authority to a court, would you? Oh, and btw, unpublished decisions are not authoritative in most if not all jurisdictions.
That's just great. If this is a liquidated damages clause with an unenforceable penalty. I gave you reasons why it is not, so you're case law is not controlling.
I'm afraid you don't understand what "liquidated damages" means. Liquidated damages is a term of art that refers to any provision that specifies the amount of damages within the contract. Hence, this is a liquidated damages provision.
In any case, my aim here was not to get into an argument with a non-lawyer over what the law is. I just wanted to correct the misstatements of law so that others reading this thread will understand that, contrary to what some have asserted, there's a substantial likelihood that the fee here would be found unenforceable if challenged in court. Anyone interested is of course welcome to research the question themselves, or if anyone has actual questions (rather than baelessly insisting that the law is as they think it should be), I'd be happy to hear them.
I'm afraid you don't understand what "liquidated damages" means. Liquidated damages is a term of art that refers to any provision that specifies the amount of damages within the contract. Hence, this is a liquidated damages provision.
You mistake my understanding of what a liquidated damages clause is with my disagreement that this is a liquidated damages clause with an unenforceable penalty. In other words, I disagree with you that this is a liquidated damages clause with an unenforceable penalty, that doesn't mean that I don't know what a liquidated damages clause is.
Quote:
Originally Posted by SMN
In any case, my aim here was not to get into an argument with a non-lawyer over what the law is.
Um, how do you know what I am or am not?
Quote:
Originally Posted by SMN
I just wanted to correct the misstatements of law so that others reading this thread will understand that, contrary to what some have asserted,
Misstatements of law. It seems that you and I disagree on the facts (the damages clause enforcebility) and you are unable to provide any case law that is on point. Give me one case holding that a cancellation fee in a cell phone contract was unenforceable? I don't mean to suggest by the question that there isn't any case law, I just want to see it.
Quote:
Originally Posted by SMN
there's a substantial likelihood that the fee here would be found unenforceable if challenged in court.
Substantial likelihood? Where is the case-law then on the non-enforceability of cellphone cancellation fees?
Quote:
Originally Posted by SMN
Anyone interested is of course welcome to research the question themselves, or if anyone has actual questions (rather than baelessly insisting that the law is as they think it should be), I'd be happy to hear them.
Funny. Speaking of baseless, this is exactly what you've done. All your arguments boil down to policy reasons: why contracts of adhesion are bad/get less judicial deference, why these kinds of fees should not be enforced...ect.
Here we go again... this is not news. If any of you bothered to read your current cell phone contracts (as long as you're not month-to-month), nearly all cell services have a penalty for breaking the contract. Ho-hum.
I'm afraid you don't understand what "liquidated damages" means. Liquidated damages is a term of art that refers to any provision that specifies the amount of damages within the contract. Hence, this is a liquidated damages provision.
In any case, my aim here was not to get into an argument with a non-lawyer over what the law is. I just wanted to correct the misstatements of law so that others reading this thread will understand that, contrary to what some have asserted, there's a substantial likelihood that the fee here would be found unenforceable if challenged in court. Anyone interested is of course welcome to research the question themselves, or if anyone has actual questions (rather than baelessly insisting that the law is as they think it should be), I'd be happy to hear them.
-S.
Just a naive question here:
Could AT&A argue that the damages in this situation are due to the loss of potential income from the service plan fees? I mean, they agreed to a contract under the understanding that they could offset their infrastructure costs with a minimum stream of income every month, that would last for at least 2 years.
Could AT&A argue that the damages in this situation are due to the loss of potential income from the service plan fees?
Read one me my replies to .S. I made a similar argument. You can't assume that the cancellation fee is tied to the phone and not to the cancellation of the service contract, and vice versa, I suppose.
Comments
low tech solution to a high tech problem.
What states could those be? Please get back with an answer after you do some research.
Just a speculation, states have some pretty weird laws on the books. Montana comes to mind, however I'm not pressing the point. $175 is way better than being on the hook for the whole thing.
m
A contract is a contract. If you sign it, even if it is a contract of adhesion or you don't read it, you are bound by its terms. If you don't like the terms, don't sign/buy the phone. Caveat emptor.
Very good advice.
Putting aside whether this would be a good or bad policy, it's not how the law works in any jurisdiction in the U.S. that I'm aware of.
Really? Then you should be able to provide ample, specific examples rather than generalizations. Please name the jurisdictions and provide the appropriate case law.
The $175 cancellation fee is a liquidated damages clause which, since it isn't justified here by a subsidy on the phone, runs a very substantial chance of being deemed an unenforceable penalty clause
The validity of this depends on whether the cancellation fee is a liquidated damages clause that is tied to the price of the phone. First, the fee could be imposed for simply breaching the contract, period. The contract itself could provide for such a fee regardless of whether or not the fee is justified because the phone is not being subsidized. These are some of the policy questions you alluded to. Second, the fee could be for breaking the two year service contract, not to recoup costs from any phone subsidy.
(As far as contracts of adhesion go, you're quite wrong on that as well - they get less judicial deference almost everywhere, but the specifics of how that works is a hotly contested issue in the law right now - but here that will just be subsumed as one of the several factors in the liquidated damages analysis.)
Less juducial deferrance does not make contracts of adhesion unenforceable. How how am I quite wrong exactly? Contracts of adhesion are enforceable and are a necessity in a capitalist society (policy argument). Read Carnival Cruise Lines. If a jurisdiction clause on the back of a cruise ship ticket is enforceable, why wouldn't this fee be?
Really? Then you should be able to provide ample, specific examples rather than generalizations. Please name the jurisdictions and provide the appropriate case law.
Run a Westlaw search in the ALLSTATES database for:
CO(high) & "liquidated damages" /s "unenforceable penalty"
Here's a list of authorities from state supreme courts. Every single one of them says that liquidated damages clauses are unenforceable if they represent a penalty rather than a reasonable measure of actual damages:
1. H Olsen v. T.A. Tyre General Contractor, Inc., 907 A.2d 146, 2006 WL
2661140, Unpublished Disposition, Del.Supr., August 24, 2006
2. Wisconsin Auto Title Loans, Inc. v. Jones, 290 Wis.2d 514, 714 N.W.2d
155, 2006 WL 1419645, 2006 WI 53, , Wis., May 25, 2006
3. H Delaware Bay Surgical Services, P.C. v. Swier, 900 A.2d 646, 2006 WL
1419394, 24 IER Cases 1239, , Del.Supr., May 22, 2006
4. H Bates Advertising USA, Inc. v. 498 Seventh, LLC, 7 N.Y.3d 115, 850
N.E.2d 1137, 818 N.Y.S.2d 161, 2006 WL 1273810, 2006 N.Y. Slip Op.
03640, , N.Y., May 11, 2006
5. H Board of Educ. of Talbot County v. Heister, 392 Md. 140, 896 A.2d 342,
2006 WL 940680, 208 Ed. Law Rep. 819, 24 IER Cases 702, , Md., April
13, 2006
6. H TAL Financial Corp. v. CSC Consulting, Inc., 446 Mass. 422, 844 N.E.2d
1085, 2006 WL 802472, , Mass., March 31, 2006
7. H BMG Direct Marketing, Inc. v. Peake, 178 S.W.3d 763, 2005 WL 3077425,
49 Tex. Sup. Ct. J. 84, , Tex., November 18, 2005
8. C Sheehan & Sheehan v. Nelson Malley and Co., 121 Nev. 481, 117 P.3d 219,
2005 WL 1906919, , Nev., August 11, 2005
9. H Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 2005 WL 1186289, 162
Oil & Gas Rep. 511, 48 Tex. Sup. Ct. J. 671, , Tex., May 20, 2005
10. C American Car Rental, Inc. v. Commissioner of Consumer Protection, 273
Conn. 296, 869 A.2d 1198, 2005 WL 756772, , Conn., April 12, 2005
11. JMD Holding Corp. v. Congress Financial Corp., 4 N.Y.3d 373, 828 N.E.2d
604, 795 N.Y.S.2d 502, 2005 WL 729150, 2005 N.Y. Slip Op. 02565, ,
N.Y., March 31, 2005
12. S. Brooke Purll, Inc. v. Vailes, 850 A.2d 1135, 2004 WL 1171382, ,
D.C., May 27, 2004
13. C Arrowhead School Dist. No. 75, Park County v. Klyap, 318 Mont. 103, 79
P.3d 250, 2003 WL 22455530, 182 Ed. Law Rep. 915, 20 IER Cases 872,
2003 MT 294, , Mont., October 28, 2003
14. C Carr-Gottstein Properties, Ltd. Partnership v. Benedict, 72 P.3d 308,
2003 WL 21419020, , Alaska, June 20, 2003
15. C Varney Business Services, Inc. v. Pottroff, 275 Kan. 20, 59 P.3d 1003,
2002 WL 31840896, 148 Lab.Cas. P 59,714, 19 IER Cases 861, , Kan.,
December 20, 2002
16. H Lewis v. Premium Inv. Corp., 351 S.C. 167, 568 S.E.2d 361, 2002 WL
1787986, , S.C., August 05, 2002
17. H Progressive Data Systems, Inc. v. Jefferson Randolph Corp., 275 Ga.
420, 568 S.E.2d 474, 2002 WL 1517841, 02 FCDR 2090, , Ga., July 15,
2002
18. H Huntington Eye Associates, Inc. v. LoCascio, 210 W.Va. 76, 553 S.E.2d
773, 2001 WL 755404, 144 Lab.Cas. P 59,356, 18 IER Cases 1303, , W.Va.,
July 06, 2001
19. United Cable Television of Baltimore Ltd. Partnership v. Burch, 354 Md.
658, 732 A.2d 887, 1999 WL 540309, , Md., July 26, 1999
20. H Gordonsville Energy, L.P. v. Virginia Elec. and Power Co., 257 Va. 344,
512 S.E.2d 811, 1999 WL 100444, , Va., February 26, 1999
21. C O'Brian v. Langley School, 256 Va. 547, 507 S.E.2d 363, 1998 WL 774519,
130 Ed. Law Rep. 1358, , Va., November 06, 1998
22. C Wandler v. Lewis, 567 N.W.2d 377, 1997 WL 411495, 1997 SD 98, , S.D.,
July 23, 1997
23. Aurora Business Park Associates, L.P. v. Michael Albert, Inc., 548
N.W.2d 153, 1996 WL 284560, , Iowa, May 22, 1996
24. BankWest, N.A. v. Groseclose, 535 N.W.2d 860, 1995 WL 455499, , S.D.,
August 02, 1995
25. C Van Velson Corp. v. Westwood Mall Associates, 126 Idaho 401, 884 P.2d
414, 1994 WL 587052, , Idaho, October 27, 1994
26. Wallace Real Estate Inv., Inc. v. Groves, 124 Wash.2d 881, 881 P.2d
1010, 1994 WL 544305, , Wash., October 06, 1994
27. Wasserman's Inc. v. Township of Middletown, 137 N.J. 238, 645 A.2d 100,
1994 WL 406939, , N.J., August 02, 1994
28. Brooks v. Bankson, 248 Va. 197, 445 S.E.2d 473, 1994 WL 248434, , Va.,
June 10, 1994
29. C Mason v. Fakhimi, 109 Nev. 1153, 865 P.2d 333, 1993 WL 530299, , Nev.,
December 23, 1993
30. H Loomis v. Lange Financial Corp., 109 Nev. 1121, 865 P.2d 1161, 1993 WL
530904, , Nev., December 22, 1993
31. Lake Ridge Academy v. Carney, 66 Ohio St.3d 376, 613 N.E.2d 183, 1993
WL 187792, 82 Ed. Law Rep. 1181, , Ohio, June 16, 1993
32. C United Air Lines, Inc. v. Hewins Travel Consultants, Inc., 622 A.2d
1163, 1993 WL 112117, , Me., March 31, 1993
33. Phillips v. Phillips, 820 S.W.2d 785, 1991 WL 260013, , Tex., December
11, 1991
34. Highgate Associates, Ltd. v. Merryfield, 157 Vt. 313, 597 A.2d 1280,
1991 WL 197966, , Vt., August 23, 1991
35. H Jessen v. Jessen, 810 P.2d 987, 1991 WL 67057, , Wyo., May 03, 1991
36. C Technical Aid Corp. v. Allen, 134 N.H. 1, 591 A.2d 262, 1991 WL 33844,
, N.H., March 13, 1991
37. Lefemine v. Baron, 573 So.2d 326, 1991 WL 1326, 16 Fla. L. Weekly 27, ,
Fla., January 03, 1991
38. C Christacos v. Blackie's House of Beef, Inc., 583 A.2d 191, 1990 WL
194428, , D.C., December 07, 1990
39. C 301 Dahlgren Ltd. Partnership v. Board of Supervisors of King George
County For and on Behalf of Dahlgren Sanitary Dist., 240 Va. 200, 396
S.E.2d 651, 1990 WL 137911, , Va., September 21, 1990
40. H Joseph F. Sanson Inv. Co. v. 268 Ltd., 106 Nev. 429, 795 P.2d 493, 1990
WL 101021, , Nev., July 18, 1990
41. Pacheco v. Scoblionko, 532 A.2d 1036, , Me., October 30, 1987
42. C Taylor v. Sanders, 233 Va. 73, 353 S.E.2d 745, , Va., March 06, 1987
43. H Koenings v. Joseph Schlitz Brewing Co., 126 Wis.2d 349, 377 N.W.2d 593,
, Wis., November 26, 1985
44. C Prentice v. Classen, 355 N.W.2d 352, , S.D., September 26, 1984
45. Wassenaar v. Panos, 111 Wis.2d 518, 331 N.W.2d 357, 40 A.L.R.4th 266, ,
Wis., March 29, 1983
46. C W.L. Scott, Inc. v. Madras Aerotech, Inc., 103 Idaho 736, 653 P.2d 791,
35 UCC Rep.Serv. 956, , Idaho, October 15, 1982
47. Court Rooms of America, Inc. v. Diefenbach, 425 N.E.2d 122, , Ind.,
September 01, 1981
48. Walter Motor Truck Co. v. State By and Through Dept. of Transp., 292
N.W.2d 321, , S.D., May 21, 1980
49. C Smith v. King, 100 Idaho 331, 597 P.2d 217, , Idaho, July 02, 1979
50. H Fortune Bridge Co. v. Department of Transp., 242 Ga. 531, 250 S.E.2d
401, , Ga., October 18, 1978
51. Truck Rent-A-Center, Inc. v. Puritan Farms 2nd, Inc., 41 N.Y.2d 420,
361 N.E.2d 1015, 393 N.Y.S.2d 365, , N.Y., February 24, 1977
52. C Local 34, State, County and Municipal Emp. of Am. Federation of State,
County and Municipal Emp., AFL-CIO v. Hennepin County, 310 Minn. 283,
246 N.W.2d 41, , Minn., September 17, 1976
53. Southeastern Land Fund, Inc. v. Real Estate World, Inc., 237 Ga. 227,
227 S.E.2d 340, , Ga., July 09, 1976
54. C Growney v. C M H Real Estate Co., 195 Neb. 398, 238 N.W.2d 240, , Neb.,
February 05, 1976
55. C B & L Painting Co., Inc. v. United Pac. Ins. Co., 165 Mont. 259, 527
P.2d 554, , Mont., October 29, 1974
56. Swenson v. File, 3 Cal.3d 389, 475 P.2d 852, 90 Cal.Rptr. 580, 1970
Trade Cases P 73,368, , Cal., October 29, 1970
57. C Dave Gustafson & Co. v. State, 83 S.D. 160, 156 N.W.2d 185, , S.D.,
February 13, 1968
58. Medak v. Hekimian, 241 Or. 38, 404 P.2d 203, , Or., June 30, 1965
59. C Camp v. Cohn, 151 Conn. 623, 201 A.2d 187, , Conn., May 12, 1964
60. C Berger v. Shanahan, 142 Conn. 726, 118 A.2d 311, , Conn., November 15,
1955
61. C Wade & Dunton v. Gordon, 144 Me. 49, 64 A.2d 422, , Me., February 28,
1949
62. C Mid-Continent Life Ins. Co. v. Goforth, 193 Okla. 314, 143 P.2d 154,
1943 OK 244, , Okla., June 15, 1943
63. C Factory Realty Corp. v. Corbin-Holmes Shoe Co., 312 Mass. 325, 44
N.E.2d 671, 166 A.L.R. 384, , Mass., October 29, 1942
64. C Malone v. Levine, 240 Mich. 222, 215 N.W. 356, , Mich., October 03,
1927
Is that sufficient authority for you?
There is a choice here.
Oh, that's right. I can get an iPhone with AT&T, AT&T, or even AT&T. I like those choices.
AT&T is forcing people to sign contracts?
If they're going to buy an iPhone, yeah.
There is a choice here.
Commit to AT&T for two years or don't buy an iPhone at all. Nice choices.
If you don't like the terms, don't buy it. No one is forcing anyone to do anything.
As you might have figured out by my previous comments, I balk at those who say I have a "choice."
The fact of the matter is: If I want an iPhone there's only ONE way to get it. I have to get a 2-year service contract at whatever rates they decide to charge and if I don't like the service I get to pay $175 to back out.
Um, you wrote:
What justification does AT&T have for such a fee in this situation?
Louzer replied that it is a contractual justification. He answered your question.
Sorry to nick-pick, but AT&T is forcing people to sign contracts? People are being forced to buy this phone against their will now? Are they?
There is a choice here. If you don't like the terms, don't buy it. No one is forcing anyone to do anything.
Are you slow?
I get that there's a contract. And I get that no one has to sign it.
The question was "how do they justify that charge"?
"Because they put it in the contract" isn't a answer.
And when you get service better then you expected,...
On a cell phone? Riiiiight.
No one I've ever known has said they get too good of a signal or that their phone doesn't drop calls as much as it should.
The validity of this depends on whether the cancellation fee is a liquidated damages clause that is tied to the price of the phone. First, the fee could be imposed for simply breaching the contract, period. The contract itself could provide for such a fee regardless of whether or not the fee is justified because the phone is not being subsidized. These are some of the policy questions you alluded to. Second, the fee could be for breaking the two year service contract, not to recoup costs from any phone subsidy.
Nope, my point was that this is precisely what is NOT permitted. A contract provision that provides for a specific penalty in the event of a breach is known as a liquidated damage clause. Liquidated damage clauses are only enforceable if (a) it would be very difficult or costly for a court to ascertain what the actual amount of damages caused by the breach is (as measured by the difference between where the non-breacher would be had the contract been fully performed and where the non-breacher actually is as a result of the breach), and (b) the amount in the liquidated damages clause constitutes a reasonable estimate of what the actual damages might be.
A fee "imposed simply for breaching the contract" - that is, one that isn't to compensate the non-breacher for actual damages (or a reasonable measure thereof), but rather intended solely to penalize the party for breaching the contract - is unenforceable. (There are very good policy justifications for this, but I'm not going to get into them here.) Such a penalty clause is unenforceable, as per the cases I listed.
-S.
The validity of this depends on whether the cancellation fee is a liquidated damages clause that is tied to the price of the phone. First, the fee could be imposed for simply breaching the contract, period. The contract itself could provide for such a fee regardless of whether or not the fee is justified because the phone is not being subsidized. These are some of the policy questions you alluded to. Second, the fee could be for breaking the two year service contract, not to recoup costs from any phone subsidy.
Yes, but doesn't it (as some on this thread have touched upon already) seem highly likely that the fact that you are paying full price for the iPhone, suggest that the phone company will not need to charge so much per month for voice and/or data plans. And, if they do supply a 'reduced cost' (one might say 'subsidised') monthly fee relative to voice and data plans for subsidised phones, they will expect recompense for breach of that contract and the loss of their income both in the future and up to the point of cancellation compared with more expensive voice/data plans.
Overall, I'd see this cancellation fee is great news as it entirely fits with the prospect of reduced cost of voice or data (or both).
Run a Westlaw search in the ALLSTATES database for:
CO(high) & "liquidated damages" /s "unenforceable penalty"
Is that sufficient authority for you?
That's just great. If this is a liquidated damages clause with an unenforceable penalty. I gave you reasons why it is not, so you're case law is not controlling. Any cases on point? Involving cell phone contracts? Don't think so, but I'm looking forward to another list of cases.
Oh, and I highly doubt that you read these cases before you send them to me. You wouldn't do that when writing a brief and presenting cases as legal authority to a court, would you? Oh, and btw, unpublished decisions are not authoritative in most if not all jurisdictions.
Are you slow?
I have to be slow, otherwise, I could never get you to understand the obvious.
"Because they put it in the contract" isn't a answer.
Take the "isn't a" out of the above statement and replace it with "is the" and you've got it.
Oh, that's right. I can get an iPhone with AT&T, AT&T, or even AT&T. I like those choices.
There is another, more fundamental choice. Buy it or don't. I would like to be able to buy a Ferrari from GM at GM prices, but it ain't gonna happen.
That's just great. If this is a liquidated damages clause with an unenforceable penalty. I gave you reasons why it is not, so you're case law is not controlling.
I'm afraid you don't understand what "liquidated damages" means. Liquidated damages is a term of art that refers to any provision that specifies the amount of damages within the contract. Hence, this is a liquidated damages provision.
In any case, my aim here was not to get into an argument with a non-lawyer over what the law is. I just wanted to correct the misstatements of law so that others reading this thread will understand that, contrary to what some have asserted, there's a substantial likelihood that the fee here would be found unenforceable if challenged in court. Anyone interested is of course welcome to research the question themselves, or if anyone has actual questions (rather than baelessly insisting that the law is as they think it should be), I'd be happy to hear them.
-S.
I'm afraid you don't understand what "liquidated damages" means. Liquidated damages is a term of art that refers to any provision that specifies the amount of damages within the contract. Hence, this is a liquidated damages provision.
You mistake my understanding of what a liquidated damages clause is with my disagreement that this is a liquidated damages clause with an unenforceable penalty. In other words, I disagree with you that this is a liquidated damages clause with an unenforceable penalty, that doesn't mean that I don't know what a liquidated damages clause is.
In any case, my aim here was not to get into an argument with a non-lawyer over what the law is.
Um, how do you know what I am or am not?
I just wanted to correct the misstatements of law so that others reading this thread will understand that, contrary to what some have asserted,
Misstatements of law. It seems that you and I disagree on the facts (the damages clause enforcebility) and you are unable to provide any case law that is on point. Give me one case holding that a cancellation fee in a cell phone contract was unenforceable? I don't mean to suggest by the question that there isn't any case law, I just want to see it.
there's a substantial likelihood that the fee here would be found unenforceable if challenged in court.
Substantial likelihood? Where is the case-law then on the non-enforceability of cellphone cancellation fees?
Anyone interested is of course welcome to research the question themselves, or if anyone has actual questions (rather than baelessly insisting that the law is as they think it should be), I'd be happy to hear them.
Funny. Speaking of baseless, this is exactly what you've done. All your arguments boil down to policy reasons: why contracts of adhesion are bad/get less judicial deference, why these kinds of fees should not be enforced...ect.
I'm afraid you don't understand what "liquidated damages" means. Liquidated damages is a term of art that refers to any provision that specifies the amount of damages within the contract. Hence, this is a liquidated damages provision.
In any case, my aim here was not to get into an argument with a non-lawyer over what the law is. I just wanted to correct the misstatements of law so that others reading this thread will understand that, contrary to what some have asserted, there's a substantial likelihood that the fee here would be found unenforceable if challenged in court. Anyone interested is of course welcome to research the question themselves, or if anyone has actual questions (rather than baelessly insisting that the law is as they think it should be), I'd be happy to hear them.
-S.
Just a naive question here:
Could AT&A argue that the damages in this situation are due to the loss of potential income from the service plan fees? I mean, they agreed to a contract under the understanding that they could offset their infrastructure costs with a minimum stream of income every month, that would last for at least 2 years.
I just love how all the IANALs are here are thinking they can easily outsmart AT&T's highly paid legal department.
AT&T: Charging this fee is probably illegal, buuuut, what the hell, let's do it anyway.
BTW, has this even been confirmed yet? All this arguing based on nothing more than speculation.
Just a naive question here:
Could AT&A argue that the damages in this situation are due to the loss of potential income from the service plan fees?
Read one me my replies to .S. I made a similar argument. You can't assume that the cancellation fee is tied to the phone and not to the cancellation of the service contract, and vice versa, I suppose.