Martial Arts Studio

[SCR52596]

What is the name of your state? WI

I entered into a 1 year contract for my son at a martial arts studio. At that time I was concerned with entering into such a long expensive contract so I asked if we moved could the contract be broken, I was told yes and it was written on my contract. Approximately 6 months later a new program was introduced and we signed up for that. At that time I asked if all the same terms applied in reference to our moving clause. I was told yes but it was not written on the new contract. We paid in full for a three year membership to avoid finance charges. I do not remember ever actually receiving a copy of this new one so I asked for a copy from the studio and was given a xerox copy of one.

On the top of the Contracts there are three boxes, one says new, one says rewrite, and one says PIF. On my first contract the New box is checked. On the xerox copy of the second contract the Rewrite box is checked as well as the PIF box is checked. The new box is circled.

We are relocating to a new state and have tried to get our refund. The owner of the studio is refusing a full refund saying he has no obligation to refund our money. He is offering $600 cash or transfering 8 months membership to another studio. We have not used 15 months of this membership totally $2484, which is the refund I am asking for.

I feel because of what is written on the first contract and our verbal agreement on the second I am due the whole amount of membership we will not use due to our move. I know that verbal agreements are hard to prove but I have shown that it is something I would want agreed to before entering into an agreement by having it written on my first contract.

Am I correct in my thinking therefore right in considering taking this to small claims court. Or should I be happy with his offer?
Thanks!

 

[shortbus]

Three arguments you can make in small claims court to get a full refund:

1) There was an oral agreement. This is probably binding, though the "statute of frauds" in your state may require a written agreement.

2) Argue that the 2nd contract was not an entirely new agreement, but a modification of the first one. The checkboxes seem to show this. In which case, the moving provision should carry through.

3) Impracticability. This is a recognized rule in contract law. If you're moving away, it's impossible, practically speaking, for you to use the martial arts contract. THerefore it's void.

 

[SCR52596]

Thank You and Follow-up

Thank you very much for your response. I have a couple of follow-up questions.

1. Should I try to present these arguements to the owner of the studio before I file in small claims court? It seems like the right thing to do to avoid having to go to court but yet on the other hand it seems like he would be able to prepare his arguements then. Our phone conversations are centered on him saying he is absolutely right and a great business man and his contract is iron-clad. He is trying to intimidate me by saying I will never get anything from him because his contract is so iron-clad.

2. If he hired a lawyer and for some reason he won, would I ultimately be responsible for his legal costs? I have been trying to find this information on-line. I have been able to find that if you file suit and win you can collect a certain capped amount of your legal fees based on the settlement amount. I have not been able to find anything about the situation if you lose. Would he have to file a counter-suit or a whole new case to recoup these costs or are there provisions that automatically give him the ability to get his money back.

 

[shortbus]

4) another argument: usually "no refund" clauses are only enforced when they're reasonable (ie. the money kept is proportionate to the services delivered.) THis guy would have a very hard time explaining to a court why he should get to keep ALL your money given that he's delivered very little of the service.

As for your questions:

1) Legal arguments are rarely persuasive to people who aren't lawyers. He's convinced he doesn't owe you a refund. I doubt you'll change his mind by presenting a legal argument. However, filing a complaint usually gets people's attention.

2) Depends on your local small claims court rules. Usually lawyers aren't allowed in small claims court so there's no issue of recovering costs. Probably your county has small claims information on the internet.

BTW there is no such thing as an "iron-clad" contract. Even the best-written contract can't assert a provision that's contrary to law.

 

[SCR52596]

Another Follow-up

I am still going round and round with this and doing a lot of research.

How common is it for courts to recongnize the impossiblity of performance in contract disputes? It seems like common sense to me that I should be refunded money if I am moving to another state. It seems that in my research that courts are reluctant to accept this as a reason to break a contract.

Thank you

 

[Zigner]

3) Impracticability. This is a recognized rule in contract law. If you're moving away, it's impossible, practically speaking, for you to use the martial arts contract. THerefore it's void.

Don't argue this one - OP is moving, not the studio. There is nothing in the post to indicate that this is anything other than a voluntary move.

 

[SCR52596]

Don't argue this one - OP is moving, not the studio. There is nothing in the post to indicate that this is anything other than a voluntary move.

We are moving because this my husband accepted a new job. It is not a transfer. Does this still constitute a voluntary move?

 

[divgradcurl]

Of course. Your husband could have kept his original job, or tried to find another job close by. Just because your husband wanted to take this new job elsewhere, or wanted to make more money, or whatever, that doesn't mean that it was impossible for you to stay.

For a court to find a contract void do to impracticality, in this case the studio would have to move, or your child injured in the studio so that he or she couldn't continue with the lessons, or the studio burned down, things like that. You moving away is not the kind of thing that would cause a contract to be voided. Think about it -- if it were easy to get out of contracts, what would be the point of a contract?

Really the only good argument is that the second contract is a modification of the first contract, and therefore the written modifications to the first contract should carry over to the second. If you intend to rely on the oral agreement, first you will need some sort of proof that the oral agreement actually occured, you can't count on the other side 'fessing up to it.