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      early termination fees

      Why Corporate Lawyers Get "Confused" When You Try To Escape Contract Over Material Adverse Changes

      By Ben Popken, 1:34 PM on Wed May 9 2007, 4,303 views

      Now we know why cellphone companies have been giving customers such a hassle when they try to cancel over material changes to the contract: there's two possible definitions. Ken Adams, an experienced corporate lawyer who drafts a lot of contracts, says:

      According to Black's Law Dictionary, one meaning of material is "of such a nature that knowledge of the item would affect a person's decision-making process."

      Another meaning of material is "significant," in other words "important enough to merit attention."

      Price, for one, is historically know to affect a person's mind when buying.

      Sometimes a cellphone company will try, for instance, to argue that changing a text message rate from .10 to .15 isn't a big deal, especially if you haven't used "a lot" of that particular kind of text message. Adams suggests that lawyers use "non-trivial" if they intend the second meaning.

      We agree. The more precisely legal definition should be used when lawyers draft a legal contract.

      Otherwise, why not use definition 11 (dictionary.com), "pertaining to or characterized by an undue interest in corporeal things; unspiritual," and argue that there's no voiding, as the contract is still a celibate? — BEN POPKEN

      Rethinking "Material" and "Material Adverse Change" [AdamsDrafting] (Thanks to Peter!)

      UPDATE: Scans of Black's Law Dictionary definition for "material," inside...


      RELATED:
      Verizon Keeps Making Up Contract law To Prevent Customers From Cancelling Without Penalty
      T-Mobile Confirms You Can Cancel Without Fee Over Texting Price Increase
      Verizon Redefines "Materially Adverse" To Prevent Customer Cancellations
      Verizon: 34 Txt Msgs= Material Adverse Effect
      Verizon Makes Canceling Over Their Txt Msg Hike Impossible

      Read More: early termination fees, cancellations, contracts, readers, cellphones, materially adverse changes

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    New York, 3:44 AM
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