I opened a small business, last year. I wanted to accept credit cards, so I did some research and found the the company with the best rates also did the most volume (i.e. they are the most popular “Merchant Service” provider) They were knowledgable, and helpful and I was generally pleased.
Upon signing up, they informed me that I shouldn’t purchase a credit card terminal from anyone other than them, because they could not guarantee compatability. I might waste money buying a machine I couldn’t use. I said, sure. They were the cheapest around (rates) so I’m sure they have competitive pricing on terminals. But, THEY don’t do the leasing on terminals themselves, they work with another business that handles that.
Okay. They inform me of the monthly price, and lease term. Pricey - but I need the machine ASAP. I was due to open within the week… They sent me the lease, and I signed.
The lease header stated “This is a non-cancelable lease.” Okay, whatever. I need the machine. Even if the store was simply seasonal, the income from credit cards out-weighed the cost of the machine. – cut to now–
I’ve closed the business. I want to get rid of the credit card machine. Expensive to buy it out, but I don’t like the monthly payment. I look into how much I can sell it for… a tenth of what I am paying!… If I’m lucky! I look for the prices of the terminals BRAND NEW… They are about $300.00…
**My lease is for TWO THOUSAND DOLLARS! **
They’re ripping me off!!! They are preying on small, start-up businesses. I am being severely taken advantage of. What can I do? The lease says non-cancelable. Even if I don’t want the machince (which is only 6 months old), the company says I’m obligated to pay it off.
You need to speak to a lawyer but on the face of it I’d say you’re screwed. It is doubtful a company as large as the one you describe and doea as much business as you say has done anything illegal. Underhanded maybe but not illegal. It souldn’t surprise me at all to find the company has been down this road before with others and has their contracts refined to a degree to ensure they win the vast majority of these cases. Still…you never know till yyou seek appropriate legal counsel to look into it. Unfortunately legal action will likely cost you far more than the price of the terminal.
In the end it is incumbent upon you to be aware of the deals you sign. I understand the pressure you faced made you somewhat hasty but I seriously doubt a court will care about that. I you agree to lease a Bic Pen from me for $10 a month with no limit to the term and a buyout arrangement of $50 for that pen I don’t think you can later come back at me and say you don’t have to pay because you can buy that pen for $0.20. Clearly if you signed such a thing I think it is safe to say I took advantage of you but I don’t see that it is illegal.
Once more though consult an attorney for your options.
Umm… if you have really gone out of business and the units are leased in the name of the business, I would simply call them and tell them your business did not work out and their choices are to chase you for the lease buyout which you can’t afford to pay or agree to take the units back and to terminate the lease obligation. All they can say is no.
The optimum time to read the contract and check alternative prices is generally before you sign, not months afterward. When you’ve signed your name to a document that says “I promise to pay $X” the law tends to assume you should be taken at your word.
Look at your choices. $2000 buys some good lawyer time. Many companies will back down when faced with a letter that has a lawyer’s letterhead and begins “Without prejudice:”
My recollection of the matter may be incorrect, but isn’t there a legal principle termed a “leonine clause” (?) that esentially says that if an abusive, one-sided stipulation is inserted into a contract, it would, by its very nature, be devoid of legal strength and enforceability. Couldn’t this principle be invoked in this case (if it indeed exists as I have outlined it, once again, my recollection is quite fuzzy)?