Legal Question in Business Law in Massachusetts
Verbal Contracts with Phone Companies
My company was switched to a local telephone carrier. At the time we switched, we did the verbal OK to switch from one carrier to the other. 9 months later we decided to switch to a different carrier. They are now asking for payment on the additional 25 months of service that we did not stay with them, but had verbally agreed to on the telephone. They claim that they have a .wav file with our agreeing to this and say it will hold up in court as a binding contract. My boss feels that without her signature we shouldn't be held to it. Should we settle or take our case to court?
2 Answers from Attorneys
Re: Verbal Contracts with Phone Companies
There is a strong possibility that the telephone company's purported contract is not enforceable. However, in answer to your question of should you settle or take the case to court, what would need to be known is the amount of money involved. If the telephone company decides to file a complaint against you, regardless of your defense, your company would incur the cost of the defending the lawsuit. This could likely run into thousands of dollars. Moreover, in Massachusetts, a corporation cannot by law defend itself, it must be defended by counsel. In order to make a determination of the appropriate course to take, the amount in controversy must be known. As an aside, was there some reason for your company switching carriers? The reason could form the basis for a valid defense to any action taken by the phone carrier.
Re: Verbal Contracts with Phone Companies
You should show their "contract" to a lawyer for evaluation, but given the amount of attention in the media about this sort of thing I expect that the company isn't looking for adverse publicity and/or a real legal fight. Don't roll over on this one.
Best wishes,
LDWG
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