Contracts for services contingent on financing

[jLotz]

What is the name of your state? MN

Hello,

I have a case where I attended a college and my financial aid was denied. I attended one quarter of classes and the school is attempting to collect via small claims court for that quarter.

I was told that under contract law, if a product or service was obtained contingent on financing, and that financing is ultimately denied, that contract becomes void and none of the terms apply.

Examples I have read about this typically involve a product. Say I buy a boat, sign something stating I agree to pay so much for it, and I take it home. For some reason the financing was reversed or denied, now the contract to purchase is void and I simply need to return the boat.

Although I can't reverse time and 'untake' those classes, I can give up those credits which is what I was paying for.

My question here is: Does the contract law apply in this situation, and can I use it successfully as a defense.

Thanks,

 

[djohnson]

I think more important here than what if's, you should find out what your contract stated and if it was contingent on the financing what did it spell out. This may vary but you will probably be stuck with it. Check all information you signed and we can help you further.

 

[jLotz]

The only signature they produced was on my application for admission.

On the top of the page it clearly states, "I understand that this application is not a contract". And above my signature line it says,

"I acknowledge receipt of the NAU catalog and I have reviewed the charges and refund policy. If accepted, I agree to abide by the policies and regulations of the university. I authorize NAU to receive my academic records from previously attended schools or colleges. To the best of my knowledge, the information given on this application is true and correct."

In the handbook I received there is only general information such as tuition costs, immunization requirements, drug/alcohol policies. They have a small section concerning financial aid but nothing specific concerning the denial of.

Even though it says that it's not a contract, they are using that as my agreement of the terms. In the complaint they state, "We have a signed application for admission dated April 10 2001 acknowledging our policies".

There is nothing stating that anything was contingent of financial aid approval nor is they’re anything about their refund policy.

 

[jLotz]

Does anyone have any comment concerning this problem? Does it help me at all that I signed an agreement that says, “this is not a contract” on it? To what extent can they refer to an external source as a condition? Like, “I have reviewed the charges and refund policy” how binding is such a statement considering that no policies are spelled out. You can give it to me bluntly; I can take it.

 

[djohnson]

My opinion is that if it doesn't state anything about it being contingent on financial aid then it wasn't. You applied, was accepted and owe. How you pay is on your on.