Hi! LegalGems here. My goal: To Do My Best To Assist You. Please remember, I can only provide general information,as this is a public forum.
I have researched the above for you, and could not find any statute that specifically addresses this issue. Therefore, in order for there to be a cancellation fee, it needs to be explicitly stated in the contract - as a provision of the contract.
If the contract does not address this issue, then it cannot be arbitrarily added at a later date, unless you agreed to modify the contract and consented to an additional provision that included a cancellation fee.
Thank you LegalGems. The owner of the facility refuses to acknowledge this discrepancy in common sense. What action may I take to bring an end to his ignorance, if any?
You are welcome. You can ask the owner on what basis s/he is alleging there is a cancellation fee. If they are unable to point to a contract signed by you (or addendum), then, if they send this to collections or attempt to collect it themselves, you can ask for validation of the debt. If they are unable to provide this, then the odds of them pursuing this in court successfully are unlikely. If you have a credit card on file, they may charge the cancellation fee to the credit card, in which case you could dispute it directly with the c/c company. If they failed to show a document authorizing cancellation fee, then generally the c/c company would resolve the issue in your favor. But it is generally a good idea to first try and resolve disputes amicably - i.e inquire as to the basis for his contention regarding how s/he can charge the fee.
The owner claims that every contract has a cancellation policy and I should have asked what it was before signing. They are also stating there is a mandatory six-month term before I even have the ability to cancel the membership, also not stated on the contract. Based on what you are telling me, it MUST be in the contract to be a valid 'term' as long as there wasn't an addendum that we both agreed upon. Since these terms weren't in the contract, if I am understanding you correctly, this is indeed bad business practice and not legally accepted as binding me to a minimum term prior to cancellation, even if the contract is valid for an 18 month period of time?
If the contract was for an 18 month period, then the consumer would be liable for the monthly fee times 18. A cancellation clause is similar to a liquidated damage clause. However, if it is simply an ongoing contract that requires say 30 days notice, and no cancellation provision, then once the 30 days notice is provided the contract is over. If it is a 18 month contract with a cancellation provision, and it was cancelled prior to the 18 months, then the cancellation fee would kick in. If no cancellation fee, then payment for the full 18 months. However, all this needs to be addressed specifically in the contract.
But it sounds as if you still have some time remaining on your contract, would that be correct?
Yes, unfortunately there are still many months remaining on the contract. There is no cancellation clause on the contract, however.
That is unfortunate - and frustrating. If there is no cancellation clause, then generally the owner would be able to sue for the remainder of the balance owing based on the number of months left on the contract (similar to the idea for an apartment lease). So if the owner was willing to implement retroactively a cancellation clause for less than the amount remaining on the contract, that could be a favorable outcome.
I see, and this retroactive cancellation clause you speak of can be under any terms the owner wishes it to be made?
No; this would be more of a negotiation. He can't enforce any clause that is not in the contract. However, if he is now offering you say a $200 cancellation fee in lieu of collecting on the $1000 remaining in monthly payments, that would be worthwhile. It's not really retroactive; that was more to explain that he would be agreeing to it retroactively.
I understand - so in this territory where a contract's payments have not been fulfilled, it is completely up to the discretion and negotiation of both parties to come to a mutually beneficial agreement.
For cancellation, that is.
Not really. Technically, the non breaching party can sue to the full extent of the damages (economic damages). However, many people prefer to negotiate so they don't have to deal with collections/lawsuits. The owner doesn't really sound like he's negotiating though; it sounds more like he believes there was a cancellation clause. But generally, yes, people prefer a mutually beneficial agreement, because lawsuits cost time, money, stress...
Okay, I believe my question has been satisfactorily answered.
I will then work with the other party to try to end this amicably.
Oh good to hear. Make sure when you sign future contracts, you read all of them. I know that is easier said than done because nowadays everything is at least 3 pages.. but it can save a hassle later on. Take care!
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