If I have a customer sign a contract that states I can sue them if they go against a condition in it, can I actually sue them?
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If I have a customer sign a contract that states I can sue them if they go against a condition in it, can I actually sue them?
I have a hedgehog breeding business and these hedgehogs are my passion and love
in life – I want them to go to responsible people. I sell hedgehogs as pets to
people approved for hedgehog pet ownership and as breeding stock to approved
breeders. I have a contract that I require all customers to sign before getting
their hedgehog and in it, I state that if they sign, they’re giving me permission
to sue them in a court of law if they bought their hedgie as a pet but are
breeding it. I want to discourage irresponsible breeding, so I’d really like to
know if that condition will hold up in court or if its not legally binding.
Thanks
Asked on August 9, 2016 under Business Law, Arizona
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
It is an unusual provision, but it should be legal (so long as it is clearly disclosed and agreed to); it's not dissimilar, conceptually, to a license which allows someone to use artwork for a given purpose, but not adapt or reproduce it, or terms of sale which allows someone to buy and use a product but not resell it, and those agreements are enforceable.
You should put in some measure of "damages," or the amount you can recover if you sue, into the agreement; this pre-determined amount, called "liquidated damages," should be reasonable, but can realistically likely be (i.e. may reasonably be upheld by the court) several hundred dollars plus your costs of court and legal costs. The reason you have to do this is that if you don't have a defined measure of loss or damage, you can only recover the actual cost or loss to you of someone else breeding their hedgehog, which may be very small in economic terms and difficult to prove; and if you don't include a provision to recover legal, etc. fees, you'll have to pay your own costs.
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