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Zachary
Zachary, Attorney
Category: Legal
Satisfied Customers: 3926
Experience:  Lead trial/International commercial attorney licensed 11 yrs
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How do I cancel a First Data equipment lease?

Resolved Question:

How do I cancel a First Data equipment lease?
Submitted: 1 year ago.
Category: Legal
Expert:  Zachary replied 1 year ago.
Hi,

I'd be happy to help you, but I need some more information.

First, tell me more about the situation.

Second, is there a written contract that you signed?

I look forward to hearing back from you.

-ZDN
Customer: replied 1 year ago.

We have a four year agreement with First Data Global Leasing for credit card equipment. The lease it does not state an early termination fee. I can send you a copy of the lease agreement if needed. I want to know if there is a way to cancel the lease since there was no early termination fee stated on the lease agreement (maybe an invalid or illegal contract).

Expert:  Zachary replied 1 year ago.
Please see if you can attach the a copy of the lease agreement to your response.

If not, then I will get an email address to which you can send it to so I can take a look at it.

Is there any thing wrong with the equipment or reason that is First Data's fault that you are terminating early?

Thanks,
ZDN
Customer: replied 1 year ago.

I cannot attach here - will have to send via email.


 


The termination is on my side since I am closing my business.

Expert:  Zachary replied 1 year ago.
Please send to zdnorris at yahoo.com
Expert:  Zachary replied 1 year ago.
Hi,

I've reviewed the contract. Unfortunately, the contract is one that cannot be cancelled or otherwise terminated until the end of the term, which is 48 months from the date the contract started. First Data has the right to your rental payment for the entire 48 months. This type of agreement is not illegal and if there is not default on their side, there is not a way to get out of the contract.

Your best option is to contact them and let them know you are closing your business and ask them to allow you out of the contract. You might even offer them a settlement and see if they would be willing to accept the offer (you will return the equipment and pay them half of the remaining rent, or something of this nature).

Please let me know if you want to further discuss this matter.

-ZDN
Customer: replied 1 year ago.

This doesn't explain all the complaints I see in regards XXXXX XXXXX Data. There must be something illegal about not having a termination feeon the contract or something of that nature. I have heard that there is a class action suite against First Data.

Expert:  Zachary replied 1 year ago.
The only argument I see is that having a non-cancellable contract without an early termination clause is unconscionable given the potential for businesses to fail within their first 48 months. An unconscionable contract violates most state Consumer Protection statutes. However, this is not a concrete argument and will depend on the facts of each case. The contract on its face is legal, and the argument against you would be that you saw the contract and the term of the contract and signed it.

I've looked at some of the complaint forums you have referenced. Everyone seems to be complaining about the same thing. Unfortunately, this type of consumer complaint generally falls under the "buyer beware" column, rather than "illegal contract" column.

You could file a suit for a declaratory judgment to seek cancellation of the contract under the following law:

California Civil Code Section 1670.5

(a) If the court as a matter of law finds the contract or
any clause of the contract to have been unconscionable at the time it
was made the court may refuse to enforce the contract, or it may
enforce the remainder of the contract without the unconscionable
clause, or it may so limit the application of any unconscionable
clause as to avoid any unconscionable result.
(b) When it is claimed or appears to the court that the contract
or any clause thereof may be unconscionable the parties shall be
afforded a reasonable opportunity to present evidence as to its
commercial setting, purpose, and effect to aid the court in making
the determination.


Frankly, this will be a very hard argument to make, and will be very expensive.

You could simply refuse to pay them, but from what I've seen they do send you to collections and will ruin your credit.

A consumer lawyer's group is investigating the potential for a class action. You can contact them at: http://www.classadvocate.com/classaction.php?id=1573
to register with them.

In the end, the only way you are going to get out of this is either by suing them (which will not be cheap) or by refusing to pay and closing your accounts and disputing their collection efforts.

-ZDN
Customer: replied 1 year ago.

So don't you think that the the amount they are charging for the lease of the equipment (48 months) and then charging you for purchase of the equipment after the lease term is an unconscionable clause as well as not having an early termination fee written in the contract. I know that I should have been "buyer beware" on this but my business partner signed into this contract without letting me read the entire contract first and I am now just finding out - not that this has any relevance. Also, what about any verbal agreements made during negotiation of the contract? If the First Data sales person made verbal agreements that were not followed up in the written agreement would I have any recourse?

Expert:  Zachary replied 1 year ago.
From an outside perspective, I don't think it is unconscionable on its face. It's a very bad deal for the consumer, but bad deals are not illegal. One could attempt to argue unconscionability, but these are very hard arguments.

As to verbal agreements made during the negotiation of the contract, this can arise to something that can allow cancellation of the contract under a claim for "fraud in the inducement". If they made a material misrepresentation about the contract, then you sue them for fraud and ask for "rescission" of the contract.

What kind of misrepresentations did they make to you?

Expert:  Zachary replied 1 year ago.
HI,

I've spent a significant amount of time on your question and reviewed a document for you. Please rate my answer positively so that I might receive compensation for my work.

Thanks,
ZDN
Zachary, Attorney
Category: Legal
Satisfied Customers: 3926
Experience: Lead trial/International commercial attorney licensed 11 yrs
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