Is it legal for a satellite company to charge me a fee of $20 per month of the unfulfilled contract if I want to disconnectdue topoor service?

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Is it legal for a satellite company to charge me a fee of $20 per month of the unfulfilled contract if I want to disconnectdue topoor service?

I have had them for 3 months and have had 3 problems with losing signal in normal weather conditions, each time requiring a service tech to come out and fix the problem. I lost the signal today and they cannot get a service tech here for 5 days. The 1st time took 3 days; the 2nd time they came the next day.

Asked on May 28, 2011 under General Practice, Iowa

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

As a general matter, can the service agreement with a satellite or other company state that in the event of early termination or breach of contract, they can charge a fee (or liquidated damages) of $20 per month? Yes--if you agreed to such a fee, it would be enforceable. Conversely, if the fee is not in the service agreement you signed, they can't arbitrarily add one.

However, even if the fee is in the service agreement, they *might* not be able to charge it in the case of sufficiently bad service; in that case, you would argue that the cable company itself first breached the contract, terminating it, by not providing you the service you were paying for.

The problem is, there is no bright line or hard-and-fast rule as to when that occurs. Clearly, *some* amount of disruption of service is natural with any utility, TV service, etc. When it crosses into effectivley being breach of contract is not clear. You would, if you wanted to disconnect, take the perspective the TV company has breached; but if they refuse to accept that interpretation and try to impose fees, etc., you may well find yourself in litigation.


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