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 Post subject: is the "poison pill" in window contracts legal?
PostPosted: Fri Apr 27, 2012 2:22 pm 

Joined: Tue Apr 24, 2012 10:37 pm
Posts: 21
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Most of the contracts presented so far have the poison pill in them. The threat that if you breach the contract, you owe 25% of the contract price as a fee/penalty.

But Minnesota consumer protection statute 325F.69 subdivision 4 says
Quote:
Subd. 4.Solicitation of money for merchandise not ordered or services not performed.The act, use, or employment by any person of any solicitation for payment of money by another by any statement or invoice, or any writing that could reasonably be interpreted as a statement or invoice, for merchandise not yet ordered or for services not yet performed and not yet ordered, whether or not any person has in fact been misled, deceived, or damaged thereby, is enjoinable as provided in section 325F.70.


https://www.revisor.mn.gov/statutes/?id=325F.69

I'm not a lawyer, but it sounds like the poison pill could be reasonably construed to being obligated to pay for a service not performed or ordered. Anyone else have any info on this?


I have also received contracts that have failed to comply with the buyers right to cancel per Minnesota statute 325G.08 subdivision 1(b)
Quote:
(b) furnish the buyer with a fully completed receipt or copy of a contract pertaining to the sale which shows the date of the transaction, contains the name and address of the seller, and in immediate proximity to the space reserved in the contract for the signature of the buyer or on the front page of the receipt if a contract is not used and in boldface type of a minimum size of ten points, a statement in substantially the following form:
...


https://www.revisor.mn.gov/statutes/?id=325G.07

According to the law, you have the right to cancel until the seller complies, so essentially a free extention of the 3-day law, per subdivison 2
Quote:
Subd. 2.Alternative cancellation notice.In lieu of the notice of cancellation required by subdivision 1, the seller may provide a notice which conforms to applicable federal law or regulation so long as it provides the information required by subdivision 1. Until the seller has complied with this section the buyer may cancel the home solicitation sale by notifying the seller in any manner and by any means of the intention to cancel.



Last edited by J-Windows on Fri Apr 27, 2012 3:16 pm, edited 1 time in total.

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 Post subject: Re: is the "poison pill" in window contracts legal?
PostPosted: Fri Apr 27, 2012 2:42 pm 

Joined: Wed Feb 01, 2012 9:14 pm
Posts: 381
Location: New Jersey Window Pro- Northern NJ and Central NJ
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if you are that worried about a contract then perhaps you are'nt comfortable with the company. i never had a customer scrutinize a contract that closely. they either trust me or they dont. quite frankly if a customer immersed themseves that much into one of my contracts i would probably tell them we cant do business. it would worry me. especially something so cut and dry as windows or siding.


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 Post subject: Re: is the "poison pill" in window contracts legal?
PostPosted: Fri Apr 27, 2012 3:46 pm 

Joined: Tue Apr 24, 2012 10:37 pm
Posts: 21
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I fail to see the issue with a customer reading and understanding their contract when 20 or 30 thousand dollars is involved.

Many complaints that end up in the BBB or other websites could have been avoided if better attention had been paid to the contract.

This all started because I felt I had been tricked into signing a contract. It was the very first window estimate out. There was no indication that I was signing a contract or sales agreement. It was my understanding that it was just an estimate, then he gave me a paper with the estimate on it to sign. I thought it was just acknowledging receipt of the estimate, so that I could choose to accept it within two weeks before the price jumped up (a timed price).

It was only a couple days later that upon closer examination of the fine print on the back side, that I discovered this was actually a contract. And there was a poison pill 25% penalty clause. And there was no mention anywhere about the right to cancel.

And in the meantime I had researched and discoverd that the brand pitched was a low-end brand, and the sales pitch was completely misrepresenting it as a great better than anderson window. So I had no intention of accepting the estimate.

I spent an entire day having panic attacks, hyperventalating, because I felt I'd just been tricked into signing away 5000 dollars.

That's when I started researching into consumer protection laws. Luckily the state of MN gives me the 3-day right. But I could have easily waited two+ weeks still not realizing I'd actually signed a contract, and then been forced to pay 5grand penalty.

This is my public service announcement to all consumers. Read and understand before you sign. And know your rights as consumers.


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 Post subject: Re: is the "poison pill" in window contracts legal?
PostPosted: Fri Apr 27, 2012 3:57 pm 
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Joined: Tue Feb 16, 2010 6:14 pm
Posts: 1803
Location: Milwaukee, Madison areas
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Kudos to you on getting out of that in time. It is a shame that so many companies choose to operate that way, to the point where the 3 day law is necessary. I generally advise that people sign nothing on the first meeting, unless they have truly done all of their homework and know exactly what they are getting before the salesman even steps through the door. Research is your best friend as a consumer in the market for windows.


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 Post subject: Re: is the "poison pill" in window contracts legal?
PostPosted: Fri Apr 27, 2012 5:50 pm 

Joined: Tue Dec 20, 2005 11:27 am
Posts: 809
Location: Texas - Houston & Austin
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I'd sure like to see this contract that only looks like an estimate. Can you mark out the personal info and post it up for us to look at?

They didn't require a deposit of any kind?


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 Post subject: Re: is the "poison pill" in window contracts legal?
PostPosted: Fri Apr 27, 2012 9:48 pm 
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Joined: Fri Mar 11, 2005 3:58 pm
Posts: 1330
Location: Northern & Central Illinois, Chicago suburbs
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randy wrote:

They didn't require a deposit of any kind?


Good question. If no down payment was taken, it's not a valid contract anyway.


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 Post subject: Re: is the "poison pill" in window contracts legal?
PostPosted: Wed May 09, 2012 11:06 pm 

Joined: Tue Sep 12, 2006 1:20 pm
Posts: 60
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Am I right that a contract between a customer and a dealer is not valid if there was no down payment received. Does anyone have a legal source (federal or state) that can verify this. I do not require down payments and would hope that my contractual relationship with my customers are still valid.


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 Post subject: Re: is the "poison pill" in window contracts legal?
PostPosted: Tue May 15, 2012 7:19 pm 

Joined: Tue Sep 12, 2006 1:20 pm
Posts: 60
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Since no one has posted a reply I am assuming the statement that a deposit must be made to make a contract legal and binding is accepted as true.

I checked with the state contractors certification board and was referred to their legal section. They assured me that a deposit is NOT required to make a contract legal,


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 Post subject: Re: is the "poison pill" in window contracts legal?
PostPosted: Tue May 15, 2012 8:21 pm 
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Joined: Tue Feb 16, 2010 6:14 pm
Posts: 1803
Location: Milwaukee, Madison areas
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http://www.entrepreneur.com/article/175238

That amounts to nothing more than an old wive's tale. A contract can be legally binding even if it is not written, let alone involving a monetary down payment. See the above link for a good description.


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 Post subject: Re: is the "poison pill" in window contracts legal?
PostPosted: Sat May 19, 2012 6:54 am 

Joined: Fri Mar 11, 2005 3:10 pm
Posts: 225
Location: Twin Cities, Minnesota
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Minnesota always seems to have all the shady bastards. Yes a contract is legal and binding without any money down. The Poison Pill theory is just another way companies try to play in the shaded areas. The MN Department of Labor & Industry (DOLI) just sits around waiting for these idiots. Those little games dont usually last very long. Our state is usually very ruthless on those contractors. I'm pretty sure that contract would never stand up in court either. The requires us to disclose all these little things to the customer before signing. It sucks being a contractor today. The crooked ones have destroyed it for us honest ones. But we all still have to keep food on the table. Just not the Buffet we're used to. Good Luck!!!


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 Post subject: Re: is the "poison pill" in window contracts legal?
PostPosted: Sat May 19, 2012 6:31 pm 
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Joined: Fri Mar 11, 2005 3:58 pm
Posts: 1330
Location: Northern & Central Illinois, Chicago suburbs
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I was always told that consideration had to be given to make a contract binding. That is why some companies would at least ask for a dollar down. I guess everything we grow up hearing is not always true.


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 Post subject: Re: is the "poison pill" in window contracts legal?
PostPosted: Wed May 30, 2012 1:34 pm 

Joined: Wed May 30, 2012 10:14 am
Posts: 5
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Contracts are a funny set of things. While I don't have any experience with window contracts, I do have experience with other sort of contracts.

The things to remember with all of them is that contracts are there to set up civil torts, that is the ability to sue someone down the road for non-performance. A smile and a handshake is a contract, but it will be a lot harder for your lawyer to prove what you agreed to than if you have a 50 page document spelling it out. So while they should be the same enforceability, what you're really doing is putting yourself in a bad place if you don't have a clear contract.

The other thing is, contracts can absolutely have illegal provisions in them! If your state has a 3 day cancellation consumer law you can write a contract that says 1 day. When you sue, the judge will say that part of the contract is unenforceable. Shady folks do this all the time, putting in unenforceable sections just hoping to scare to into compliance, or not suing, or whatever. Large companies that do this across many jurisdictions often do this by accident, using boilerplate a bit too much.


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