Arbitration Clause: Account Credits vs Money Stipulation I'd like to start off by saying that this is somewhat of a follow-up to a previous question I had asked back in June, 2016. I've continued to struggle with trying to find an agreement that resolves the issue I've been having. In this time, I've fulfilled all the requirements to continue through to arbitration and have been preparing to do so. My question's focus pertains to the Customer Agreement clause, which explains how the arbitration reward is handled. Highlighted is the specific section: (6) WE MAY, BUT ARE NOT OBLIGATED TO, MAKE A WRITTEN SETTLEMENT OFFER ANYTIME BEFORE ARBITRATION BEGINS. THE AMOUNT OR TERMS OF ANY SETTLEMENT OFFER MAY NOT BE DISCLOSED TO THE ARBITRATOR UNTIL AFTER THE ARBITRATOR ISSUES AN AWARD ON THE CLAIM. IF YOU DON'T ACCEPT THE OFFER AND THE ARBITRATOR AWARDS YOU AN AMOUNT OF MONEY THAT'S MORE THAN OUR OFFER BUT LESS THAN $5,000, OR IF WE DON'T MAKE YOU AN OFFER, AND THE ARBITRATOR AWARDS YOU ANY AMOUNT OF MONEY BUT LESS THAN $5,000, THEN WE AGREE TO PAY YOU $5,000 INSTEAD OF THE AMOUNT AWARDED. IN THAT CASE WE ALSO AGREE TO PAY ANY REASONABLE ATTORNEYS' FEES AND EXPENSES, REGARDLESS OF WHETHER THE LAW REQUIRES IT FOR YOUR CASE. IF THE ARBITRATOR AWARDS YOU MORE THAN $5,000, THEN WE WILL PAY YOU THAT AMOUNT. To my understanding, this clause basically says if the arbitrator offers any amount of money more than what was formally offered by the business, I'll be rewarded a minimum of $5,000. The business has made a few offers, all of which are for account credits with them (and are certainly far too low to accept). Their exact response when I had asked about how their settlement offer would be paid was as follows: "This would be a direct financial adjustment to your [Phone Provider] account. You were properly advised that the promotional offers are not a cash value type of offer, but a direct financial adjustment to the account will save you the equivalent amount not having to pay your [Phone Provider] bill until the credit amount has been depleted." Questions: Since the account credit offers are worth no real cash value, would that mean that any real-money offer made by the arbitrator could/would cause me to win since money certainly gives the impression of actual currency? Is there any particular reason why an arbitration clause would floor the reward to such a notable amount? Is this number passing a threshold to prevent other legal grounds from following? Follow-up: 05/17/2017: I went through the arbitration process and was deemed an award of $900.00, along with $52.89 in interest. Both of these are going to be paid in US dollars. However, I'm still under the impression that being paid in US dollars is more "money" than the $1,300 in "non-cash value" credits they had offered prior. I sent them an email requesting they uphold the agreement, but I'm not sure if this is too much of a technicality. 05/30/2017: The business followed up with a statement of "The customer agreement does not address the delivery of the settlement offer, but the amount of it." I'm not sure if that statement is accurate since the clause denotes "money" as the medium, not a generic value. I'm just not sure if this is something that has enough foundation to fight for in another arbitration case or to potentially pursue in court. 03/09/2018: I opened a second arbitration case to contest that the business didn't conform to their customer agreement. My position was that $952.89 was worth more than $1,300 in account credits. I was found in favor and they were required to pay out the minimum value listed in the arbitration clause because account credits have no monetary value (the answer in this question helps explain why that result happened). 04/19/2018: I sent an intent-to-arbitrate letter again stating that I was looking to open a third case because they failed to pay the full amount of money in accordance with the arbitration clause below. The original approach was that they still failed to pay $5,000 each time I won a higher amount than they offered. I structured my claim that they were $5,000 short as I only received two payments, but both should have been raised to $5,000 individually. The other perspective was that they were technically only $952.89 short. 05/10/2018: We came to an agreement of a settlement amount. I am in the process of signing and finally being done with cycling arbitration claims over contract technicalities and oversights. Gathering about ten times the original claim amount was worth it, but it did take about two and a half years.
That is a bit of queer provision. I'm not going to answer your first question because I think that it is a gray area with no definitive answer. In answer to your second question, my strong suspicion is that it is drafted in the shadow of a particular state consumer protection act. An arbitration clause is allowed to change your procedural rights, but cannot change substantive rights that cannot be waived by a pre-dispute contractual agreement. If it does that, it is void and you can go to court instead of an arbitration forum. Many consumer protection laws provide that a prevailing party is entitled to minimum statutory damages in lieu of actual damages if they are smaller, in addition to your reasonable attorneys' fees and litigation costs if you prevail. This is done to make it economically viable for private citizens to sue over violations of the consumer protection law that would otherwise involve actual damages too small to be worth suing over, without having to bring a class action. If the relevant consumer protection law has a minimum $5,000 statutory damages amount for some claims covered by the clause, this clause would prevent it from being invalidated, while allowing the merchant to still have access to the consumer unfriendly arbitration forum in which class action lawsuits are probably also barred while class action lawsuits would not be in court. For a big merchant, it is far better to have to pay $5,000 and attorneys' fees to the handful of people who bring arbitrations and win them, than to lose a single class action lawsuit for millions of dollars.
I assume that you arranged a contract with some company which paid the contractor the full amount, and not you have to pay that company. If you stop paying the finance company, they will initiate legal proceedings against you to make good on your obligation, and that won't affect what the contractor does. It might not hurt you to write a formal letter (no phone calls) to the contractor stating that you require them to complete the job by some date certain, and hope that you won't have to take the matter to court. If you decide to write the letter yourself, you want to avoid saying anything that could be held against your interest, for example "I don't care how crappy a job you do, I just want this job done!": you need to be sure that what you say in a letter does not put you at a legal disadvantage. The best way to guarantee that is to hire an attorney to write the letter. If you want your money back (plus interest), you will almost certainly need to hire an attorney to write the letter. It is possible that there is an arbitration clause in your contract, requiring you to settle disputes with the firm Dewey, Cheatham &amp; Howe. In that case, your attorney might not be able to do much for you. There cannot be a clause in a contract that penalizes you simply for hiring an attorney.
Please note that I can't provide legal advice and consider the following as suggestions you can and should discuss with a lawyer of your choice: You are probably member of a tax-advisory association (Lohnsteuerhilfeverein). These associations can only advise its members on their tax declarations. Therefore you are indeed a member, not a "member". As a member you are presumably obliged to pay a yearly membership fee, and from your initial question I infer that the membership cannot be terminated before three years have passed. That and when you have to pay your fee is most likely provided for in the association's constitution. Payment of the fee does not depend on an invoice, because the requirements of § 14 UStG are most likely not met: the association is not a trader (Unternehmer), nor is a membership a performance (Leistung). Whether you have to pay a penalty depends on the wording of the section regarding the fee in the constitution. If your membership rights have been infringed by not giving you notice of the annual general meeting, this would not give you a defence or objection against the payment of the fee. You could report this matter to the competent watchdog (Aufsichtsbehörde) under § 27(1) StBerG, though: Aufsichtsbehörde ist die Oberfinanzdirektion oder die durch die Landesregierung bestimmte Landesfinanzbehörde. 2 Sie führt die Aufsicht über die Lohnsteuerhilfevereine, die ihren Sitz im Bezirk der Aufsichtsbehörde haben. That is either the Oberfinanzdirektion or the Landesfinanzbehörde in the German state where the association has its statutory seat.
What you're talking about is a liquidated-damages clause, where the contract explicitly spells out the damages to be awarded in the event of a breach. The law will vary some from state to state, but these clauses are generally enforceable. Some courts limit their use to cases where calculating the damages resulting from the breach would be impossible or impractical. But in the United States, along with all other common law jurisdictions, courts generally agree that if the liquidated-damages clause appears to penalize the breach instead of simply compensating for it, it is not enforceable. See, e.g., Ridgley v. Topa Thrift &amp; Loan Ass'n, 17 Cal.4th 970, 977 (Cal. 1998) (“A liquidated damages clause will generally be considered unreasonable, and hence unenforceable under section 1671(b), if it bears no reasonable relationship to the range of actual damages that the parties could have anticipated would flow from a breach.”) The trillion-dollar damages clause &quot;bears no reasonable relationship&quot; to the damages that would actually result from a breach of a software license, so you can safely expect a court to refuse to enforce it, and limit you to whatever damages you could actually prove in court. Even if you were to drastically reduce it to &quot;all the money you have, and then some,&quot; &quot;all the money you have,&quot; &quot;half the money you have,&quot; or even &quot; &quot;1 percent of all the money you have,&quot; the language still makes clear that the contract is not aimed at compensating for the breach, but rather penalizing the breaching party. In the end, what you're talking about isn't going to work, because contract law is generally less concerned with penalizing people than with making them whole.
This aspect (and many others) of contract law is applicable in the US and various countries of the EU. can they renege after the candidate has begun their journey, thus saddling the candidate with the travel cost? No. The company would incur breach of contract. There is no need for a formal contract. The candidate only needs to prove that the company agreed (in writing, orally or clearly through its conduct) to cover or reimburse those expenses and that this elicited a meeting of the minds. The agreement would be void if the candidate incurred the expenses despite knowing (via timely notice) that the company changed its mind. Likewise, if the candidate lied on his CV, the contract (here, the company's agreement to cover the expenses) would be voidable by the company, since the candidate's intentional misrepresentations preclude the aforementioned condition of meeting of the minds. --Edited on 1/18/2019 to add ...-- Per suggestion by @KRyan, the aspect of void or voidable contract is expanded. But first, two disclaimers are pertinent: We need to be mindful that many of the follow-up concerns are either premised on or inspired by the situation described in the underlying Workplace SE post. These are somewhat beyond the scope of this Law SE question but addressed nonetheless, given their relevance as well as the OP's &amp; audience's interest. The follow-up hypotheticals [in this Law SE question] and clarifications thereto neither speculate nor pass judgment on the stranded candidate who asked on Workplace SE. The Workplace SE post reflects a company's breach of contract. The subsequent comments here about fraud hypotheticals are mostly derivative inquiries beyond what is described in Workplace SE. In particular, we do not assume whatsoever that the stranded candidate committed fraud. The_Sympathizer commented: can the contract be voided on the spot like that without first proving in court? As it seems like it grants a rather &quot;vigilante&quot; justice power that is open to abuse, since effectively the &quot;punishment&quot; (cancellation of the flight and thus inducing a rather serious physical situation) is administered before any due process has been afforded the one accused. Yes, it can be voided on the spot (aka sua sponte). &quot;Vigilante&quot; justice denotes a self-attribution of punitive powers that exclusively belong to the state/government/court, whereas a party's voiding of a contract is the act of foreclosing his losses/exposures with respect to a contract that de facto never existed (such as when that contract was induced by fraud). I agree that unfortunately that is open to abuse: As a pretext to actually incur breach of contract, a company might allege that the contract was void. That is why (if taken to court) it will be the company's burden to prove that (1) it reasonably relied upon a candidate's representations (2) which were significant and blatantly false (3) given the candidate's knowledge that his lies contravened the job's core requirements. That can be quite burdensome. For instance, is the company handing out airfares without first conducting some competent corroborations about the candidate's credentials/skills? If so, one can hardly concede the company's allegation of reasonable reliance. The resulting finding would be that the contract was not voidable by the company, and thus that it is liable for breach of contract. Also, belatedly &quot;informing&quot; the stranded candidate that the company &quot;is going in a different direction&quot; falls short of evidencing that the contract was voidable. That applies even if the candidate performed very poorly in the interview or screening process. Given the hardship imposed on a stranded candidate, a company has to be morally and legally very judicious about its method and timing for &quot;going in a different direction&quot;. But absent any representations or [company's] bylaws to the contrary, a company generally does not have the obligation to afford due process to a candidate. The court is the entity with an obligation to enforce due process as provided by law (although many of us in the U.S. have repeatedly experienced the courts' disavowal of due process). --End of edit on 1/19/2019-- a binding agreement requires both sides to give something Here, the candidate's consideration is his time and effort to accommodate the company's interest in assessing the candidate's profile at a location that is convenient to the company.
In the United States, is it required by law for a company offering a long term service contract to include an option to opt-out of their arbitration agreement, if the customer chooses to exercise that option? No. (There may be isolated exceptions to this principle for very particular kinds of services, but the exceptions are rare and this is not the general rule.) Does it benefit the customer to use arbitration over the regular courts or is the arbitration clause in place purely for the benefit of the company? It almost never benefits the customer to use arbitration in lieu of regular courts. This is put in place primarily to prevent consumers from bringing class action lawsuits and because arbitration forums are routinely biased in favor of the company. Usually, an arbitration clause has the practical effect of denying the consumer any legal recourse whatsoever, and the consumer almost never actually utilizes this right. Also, an arbitration decision can't be overturned by a court even if it clearly and obviously misstates the facts and applies legal rules that are clearly contrary to the law.
A settlement can include whatever terms the parties agree on, short of terms prohibited by law. Usually one party gives up at lest some claims. Then other party nay also give up,claims, or make a payment, or both. There may be other terms as well, including confidentiality of the details. It is not uncommon for both parties to give up all claims against each other. Settlement agreements are legally binding on both parties. We cannot advise on what kind of settlement a particular person should take in a particular case. For tht, consult a lawyer.
No, the only purpose of a money order is that it's effectively a form of guaranteed cash that only one person can access. There are no additional protections offered by it. However, given that you are amenable to paying a little extra to facilitate your payments, you may want to consider using a credit card in the future. Provided it's not an all the time thing, credit cards will withhold payments on your behalf if a vendor fails to fulfill their obligations. This means that you're not liable for the cost of the merchant sending you the wrong thing or ignoring your order requests. I've personally done this for several things: Hotel reservation that was borderline unsuitable for human habitation. When a vendor failed to send something I'd purchased. When proceeding with this, bear in mind that the credit card company will want you to make such a claim as soon as possible and to provide as much information as possible to support your claim. If you've e-mail chains, save them. If you've been communicating by phone, write down and provide a summary of your communications. If you have an issue, don't wait a month to raise the concern, do it within a week. Probably about once a year I need to do something like this. Generally what this does is it starts a dispute process whereby the credit company will contact the vendor to get their side of the story (usually they don't respond to them either). After 60 days, the charge is dropped from your bill and presumably the credit card company refuses to pay for the disputed item. Ultimately, this gets you the best possible result. You get your money back and you didn't have to go to court to do it.