Legal Question in Business Law in California
Price Gouging
We are required by contract with our computer systems vendor to purchase equipment related to their system only from them. They charge us $12k for a network switch and then charge us $72 a month for support on the switch that costs less than $300 new, $120 for a backup tape that costs $3. Are their laws that are meant to prevent this?
3 Answers from Attorneys
Re: Price Gouging
Read The Friendly Contract. Did they put a gun to your head to get you to sign it?
Re: Price Gouging
You need to renegotiate or cancel the contract, rather than simply ignore it and be accused of breach. You should get legal review and advice before doing so. Feel free to contact me if serious.
Re: Price Gouging
There are laws that prevent incompetent individuals from having certain contracts enforced against them - children, the legally insane, feeble-minded elederly, etc. Also, a few kinds of contract provisions are unenforceable as a matter of public policy. Examples are: agreements by which someone is absolved from the consequences of his own fraud, or by which a residential landlord immunizes himself against liability to his tenant for negligence.
Ordinary business contracts between consenting adults are almost always enforced. Law students do have to study one or two examples of contracts that courts have refused to enforce on the ground of so-called unconscionability, but these involve facts that tug at the heartstrings, and are not merely examples of a business person failing to read and understand the pricing arrangements in a business contract. I'm 99.999% sure you'd get no sympathy from a judge or jury.
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