Archive for June, 2014

Breach of Contract or Bimbo?

June 18th, 2014 No comments

I have managed businesses for over 32 years. I am a tax accountant and a due diligence analyst, and have written business curriculum and taught for over 11 years. I know what employers and business owners should do to stay in business, attract & retain customers. I, like other individuals am a consumer of business and personal products. I, like everyone else, and happy when I find a good, reliable business/service provider. And am unset when things go awry. This is the story of a small business who “kicked things into the weeds”. Teaching business theory involves understanding contract law. I was a due diligence analyst and performance of contracts; and non-performance was a consideration in determining tort liability. It is a consideration when Vendors do not live up to a contract. What are the elements of a contract? Whether it is verbal or written all contracts have the following elements in common: They are mutually beneficial: parties trade money for goods/services Money or consideration is exchanged for performance They are taken by people who are able and can knowingly consent They can be rescinded or broken for non-performance They must be written if they take longer than a year to complete or      exceed $500. in value. Oh, and once agreed to, they are binding. And if one party wishes to change the contract, upon negotiation and mutual agreement the old one is cancelled, and a new one created. If in the contract for non-performance penalties or a required notification period may apply. So, back to my quandary or problem. I am an old woman who exercises so I do not fall apart. I do an hour of cardio daily, but I also have a Pilates Reformer and like to use it. I decided to find a reformer teacher so I could use my home machine safely. I needed to sharpen my skills so I did not injure myself. I saw an online ad for a local pilates studio- “5 lessons for $50″. Cool: I called mentioned the ad and said, “May I pay in cash, I want to do the Living Social Offer?”. I got a call back, paid them in cash. Very happy customer. After the 5 lessons, I waited until all the other clients and said “I am a poor accountant, and can’t afford $38. a lesson.” She said, “Well, OK”. I offered 20 a Lesson, or $200 for 10. She said, “No, that won’t do.”I said “How about $22. each or $220. in cash for ten Lessons? I will pay you in cash, and will pay you at the 10th lesson, in an envelope”. She said “Yes, that works for me.” What you just read was a verbal contract. What follows is a breach of contract and my being upset and blogging about this. So, time goes on, and I have paid for five sequential series of ten lessons for $220. in cash. The money was taken, nothing said. Nothing. So. Yesterday was the 10th lesson. I put 2 100 dollar bills and a twenty in an envelope, labeled it with my name. I arrive at the Studio, the owner is there, I hand her the envelope. She says, “Oh, didn’t (insert Assistant #1’s name) tell you it should be $300?” By that time, she has the envelope with the $220 in it. Now she has changed the contract- with no prior notice. And the rate is now $30 a lesson- or $300- not $220. I kinda do the math and figure that is at least a 27-30% increase. An increase a cannot afford. Here is the Math: 30 minus 22= 8 8 divided by 22=36.6 percent increase. I am in shock, because nothing has been said before about any rate increase; not by her, or the Assistant. Then, the kicker- she says “Yeah, your rate was introductory only, for the 1st series of 10, and you have owed the $300 for the last 2 Series” (why not five?; but obviously math or accounting is not this woman’s strong suit. I am starting to figure; let’s see 300-220= 80; 2 series at 80 = 160. She is saying I owe her $160. Plus $300; or $460? At this point other customers come in and I am in shock. What you just read is a retroactive rate increase. It ignores the previous verbal contract en entirety. And she has my $220. All I want to do is get through the Lesson and get out of there. Instead of a relaxing excise session  I am flummoxed and annoyed. How the heck am I going to get another $240 (460-220)for this woman? Shall I just show up for all ten, and wait to be hectored into paying for something to WHICH I DID NOT AGREE.

Because, dear reader, contracts give certainty. A verbal agreement is binding until BOTH parties agree to another. Charging retroactively for services without notice is a breach of contract, and might be construed as fraud. What happened? She got my $220; I figured that each work out cost me (a rate increase to which I did not agree, BTW) $30; she said I owed her $160. One sixty plus thirty is one ninety; she has two-twenty of my cash and the net net is I am out one lesson (at her new rate).

What will I do? I will call her and tell her I am not coming back. I will not bother arguing with someone who will not honor their word, i.e., a contract- I just will never go back. Or recommend her.

Now, where is that Social Media application when you need it? (Twitter, FB, LinkedIn, Yelp, Patch). Oh, and the Better Business Bureau and the Chamber of Commerce?