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Comment by Barrin92 | Hacker News Reader

"Adding insult to injury, Tesla also states that they “will be prioritizing customers based on the order in which they accept their updated agreements.” For customers who have already been waiting for months or a year for their new roof, they are now being told that they need to agree to spend tens of thousands more dollars, as quickly as possible, if they want to reduce their wait time."

okay, let me get this straight. They're increasing the cost of a contract you'd already signed and then they're passive aggressively threatening customers to push them to the back of the queue if they don't agree?

Excuse the profanity but holy shit, that is the most brazen thing I've read in a long time. How can that be legal

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It's legal enough, but what is also legal is that the other party exits the contract right there and then. Tesla offers to change the contract, and the other party does not have to agree.

If they need a new roof they can go to a regular roofer instead at a fraction of the cost.

The complication is the people who've spent money (e.g. cleared trees) predicated on getting a solar roof; IIRC you can sue for certain values of "I did X predicated on the other party's assurance they would do Y".

I don't know if it applies, but what you're talking about sounds like Promissory Estoppel.

https://www.law.cornell.edu/wex/promissory_estoppel

That's the one I was thinking about yeah.

I would assume that this again has to do with the wording of the agreement signed with Tesla. One can assume they have lawyers of their own and that they wouldn't then do something like this if it's a blatant violation of the agreement, but nothing is impossible of course, including winning in court even if Tesla didn't think you would.

If I was affected by this I would probably not think of this as a complication but rather something that would make me look at different options. So either:

1.) There are competitors that can offer a deal considered subjectively better overall, for example a faster delivery and lower price for some other compromise (like panels instead of a nice looking roof).

2.) Or, there are no competitors that you can or want to consider, in which case you either pay up, wait for the market to mature or cancel the plans completely.

There will be no "court".

Mandatory binding arbitration bans courts of law from making any decision. They are only allowed to enforce the decision of the arbiter, who does not have to follow any laws except the American Arbitration Act.

I hate mandatory arbitration clauses as much as the next guy, but what you said is just not true. Arbitration clauses are thrown out by the courts regularly. The reason is the simple fact that the arbitration clause is only enforceable by the courts, and they can always decide to do the other thing.

If you go to arbitration and you feel the result was unfair, you can always appeal to the courts. There, the judge can either affirm the decision or throw it out entirely.

You're presuming judicial review. The arbiter result is final and binding. Appeals are exhausted. You may only argue the arbitration section under a very very limited set of choices under the arbitration act. And only the arbitration section. The rest of the agreement can be capricious, unfair, and malicious. That's for the arbiter to decide on, however.

And the arbiter only gets to keep making money by hearing "cases" as long as they don't rule against the company.

The problem is the court system has chosen to liberally interpret the arbitration act against the citizenry.

Now show me all these agreements being "thrown out". What's instead happening is state laws attempting to protect the citizenry being thrown out instead.

I was renting a storage unit recently, and even they had a binding arbitration clause where they decide the mediator, etc.

This really has been a cancer on our nation, I remember the day after citizens united even xbox live had binding arbitration in a mandatory update the very next day.

Reason 749274937295 I am done with this country.

You're thinking of AT&T Mobility LLC v. Concepcion when class action was ended.

in california, you have the right to opt-out of binding arbitration within a period of time after signing any agreement.

If they would have went with a regular roofer a year ago they would have avoided price hikes on standard materials. Now they face higher costs both ways.

Given the increased costs from the epidemic I expect more contracts renegotiated...

The shady behaviour here is that they are framing this as 'updated terms' that people have to accept. Indeed this is quite aggressive and should cause whatever regulator/authorities to look into their practices.

Of course what they are actually doing is they are proposing new terms, which customers are free to refuse. The existing contracts stand and Tesla would need to follow whatever is permitted in the contract or contract law to cancel it or be liable for compensation.

I would also think that there ought to be an expectation of a reasonable deadline to execute the contract or customers can ask for a refund (at a minimum) and walk away, but IANA.

Better hope their urgent terms allow them to prioritise in this way.

Most contract law has things in place to prevent bait and switch tactics like this, especially when pressure tactics are used like threatening longer wait times.

It's likely that Tesla can walk away free and clear right up until something like a delivery or start of work.

(under the terms of the existing agreement)

If they do have the unilateral right to cancel the existing contract before starting work, offering new terms first probably won't be treated as coercive.

This is what happens when you get into business with that company. Just look up their sales for their self driving tech. Not much better.

Whether it is legal or not depends on the contracts people originally signed with them. There's no point speculating without looking at the text.

It’s also subject to laws.

Not laws, law.

The only law that matters here is the American Arbitration Act. All other laws do not apply.

As long as the AAA applies, the contract is "legal".

The arbiter's whims will decide the result, not "the law". The AAA overrides all other laws, state and federal, with respect to the contract.

Here's a copy of one of the agreements: https://www.tesla.com/sites/default/files/CI-Energy-Products...

It's not. Either party can renegotiate a contract or back out of it, pursuant to the terms of that contract. Which is why without being an attorney and seeing the actual text of the contract it's useless to speculate about whether or not Tesla can do this.

Some folks might have promissory estoppel damages as was mentioned elsewhere, but that's entirely different than "you signed this contract so you must follow through on it."

Tesla abuses its customers and for the most part they just accept it as part of the "experience".

Is that a strong indicator you got it going on or what ?

It's legal because there was no "minimal date of delivery" in the original contract. Sad, but still working.

If contract also stated/warned that there may be an increased final price then it'd be frustrating if it's such a high increase but then they were told; I don't know what their contracts said in full.

But on a purely logical level (I assume that legally things stand differently), it's effectively the same: without an agreed date limit, they could just delay it infinitely (unless the customer submits to some extra charge/price hike) and the buyer would be in a much worse situation than with a cancelled contract because the seller could pop up any day "now you get your roof, give us the money, now"

I imagine it's legal because it's a deposit, and also because caveat emptor, i.e., people are free not to do business with them. If people want to deal with random bullshit, that's their personal decision. In general, "illegal" is a very high bar to clear for most behaviours, it's easier just to decide not to put up with that as a customer especially if you haven't lost anything yet.

> people are free not to do business with them

People aren't free not to do business with people they have contracts with. That's one of the major reasons to sign a contract.

In Germany this is actually illegal. It's so illegal that it makes online business a bit more complicated. Because you can't change an online agreement unless the client agrees.

It's sad that it's not taken for granted that you can't change and agreement unilaterally. This "online economy" muddied the water enough so that basic terms like "agreement" lost their meaning. If we don't push back against this, we're heading to a world where servitude is taken for granted.

It's actually one of the things that constantly amazes me about other online businesses.

I'm still struggling with the fact that google wants to move my contract out of germany since I haven't been back since covid started. It refers to a section in the user agreement to object to it that I have not found.

It’s quite the opposite, online business in the EU is so much simpler, that I sign the contract and pay for the product online even if I go to the shop to take delivery of the product (and then have 14 days to return it). I guess ,,complicated’’ just depends on the viewpoint.

This is of course not specific to Germany, but the basis of contract law pretty much the world over.

The way it should be.

They should really legislate against the validity of these term change at whim.

The quote in the article clearly says they can get their deposit back in full, if I understood correctly. Not everything that's wrong is illegal.

> You will receive an email in the next 1-2 days when your new agreement is ready for your review and acceptance before moving forward. If you are no longer interested in moving forward with Solar Roof, you can cancel your order by logging into your Tesla Account and your deposit will automatically be refunded.

Breach of contract settlements are typically far more than the initial outlay. That's the whole purpose of contracts, agreeing on a future outcome in advance.

Something something expectation damages

I'm genuinely curious what damages would occur in the US in situation like this? I don't imagine there will be much of a direct hit to Tesla, mostly as I imagine the solar panel contracts aren't stating specific dates of completion; image wise and indirect financial cost, Tesla may not suffer much either from this bad behaviour mostly as they're optimizing for scale and seemingly being cutthroat for their own efficiency.

Afaik you have to have proof of damages, and I know in Canada at least you basically get nothing for emotional distress that may be caused - and in the US from what I know, mental pain and suffering can be a significant part of a settlement or ruling.

IANAL, but I believe the term is "detrimental reliance".

You relied on the representation of the other party that they agreed to X(written contract or not, written is easier to rove, but not essential), and then took actions based on the expectation of X.

Costs might include hard materials & labor costs for preparing the site, your labor in preparing the site, lost income for time you spent, opportunity costs of not taking advantage of other opportunities (e.g., how much electricity costs you incurred by not putting in other panels instead of their contract), and emotional distress.

The problem is going to be proving each and every one of those charges in court, in the face of both legitimate and bullsh*t arguments by Tesla's lawyers - and they will bring both types of arguments by the truckload.

What Tesla is counting on is that it will almost always cost more to pursue the lawsuit than you will recover, so no one will step up and sue. They have scale, you don't.

This is why class action lawsuits exist - so that all similarly situated plaintiffs can combine their actions into one, and pursue it with one firm. It would not surprise me that someone at a class-action firm is already examining these reports, taking notes, and making calls. Similarly, anyone with this problem should be contacting class action firms this morning.

You're going to have a hard time proving any modicum of emotional distress because Tesla raised the price of your luxury solar panel roof and charger for your Tesla from $77k to $90k.

House renovations can be incredibly stressful, which this may qualify.

As mentioned in the article, at least one individual spent thousands in preparation for his roof.

The time and effort of getting the initial work done and now the revelation of a double digit percent price increase, and a low key threat of further delays unless you sign right now?

Sounds quite distressful.

In fact, it is by design stressful, so as to pressure the consumer to accept the new contract.

I think I pointed that out - that a lawsuit as an individual is very hard to prove for a lower cost than any amount that you would recover

I.e., a lawsuit is not scaleable as an individual.

Tesla are taking advantage of that advantage of that asymmetry in scale, and basically saying "this is wrong, so sue us", knowing that few or zero will, and most will just eat that dung sandwich.

In America, they are of course free to not do business. The contract spells out the cost of doing so. In fact, this is the major purpose of contracts - specifying penalties for non-performance. It has to be a sum of money.

A contract cannot compel any action - it is an agreement on what is expected and the cost of non-compliance.

> A contract cannot compel any action - it is an agreement on what is expected and the cost of non-compliance.

Every part of this sentence before and after “it is an agreement on what is expected” is incorrect. A contract may lay out consequences of noncompliance, but it is contract law, not the terms of the contract that will set the actual consequences; those set in the contract are valid in only limited circumstances, and only then if their amount is appropriate under the law. And the manner of enforcement may be too compel performance of the obligations in the contract, see the remedy called “specific performance”.

Not as I read it? A breach results in either damages or cancellation-and-restitution. Which is money either way.

There is a little-used 'specific performance' case but that's for objects of art or whatnot, especially when no monetary value can be assigned. And in the overwhelming number of situations, should not be relied upon for remedy.

Its cash (almost) all the way.

There is truly no end to corporate apologists on HN.

Lots of people here are ok with being abused by rich and powerful aasholes if it gives them the opportunity to become rich and powerful aasholes themselves.

It's the whole "I want corporations to do literally whatever they like with no oversight, because when I run a corporation one day I want to be able to do whatever I want with no oversight".

HN commenters see themselves not as an exploited proletariat but as temporarily embarrassed CEOs.

Good one. I see what you did there!

I wouldn't describe people working at Big Tech making $12,500 per month gross as "exploited proletariat"

The corporate bootlickers posting certainly see themselves as temporarily embarrassed CEOs

I'm writing this out of pure curiosity - if you were to discover that the vast majority (more than 90%, say) of human beings that have ever lived in Human history are quite well described by what you just wrote, would you reconsider your worldview?

What world view is there to reconsider? They are pretty much stating the fact, unless we're revising facts now.

imagine thinking breaching contract is illegal.

I mean, the wording is shady, but exiting contracts isn't some end of the universe event, you pay whatever penalty are present for the contract termination and that's it.

People are also free to sue for monetary damages incurred from having to pay upfront whatever work they had to do to prepare their roof, and again, doesn't make exiting a contract illegal.

Parent is right in not jumping the shark and branding things names they aren't.

breach of contract is not a criminal offense, but very likely to land you in a civil suit on the losing side.

and? that's beyond the point being made. a tort gives the other party a legal liability, and still is not necessarily deriving form an illegal practice.

heck, it's not even clear if it's actually a breach of contract since they were willing to return deposits etc.

So, you think breaching a contract isn’t illegal, yet people can go to court and win?

What rules do you think courts use to make judgements?

absolutely. court will do enforcement of the clauses and will apply remedies for damages if a tort is found. doesn't make breaching contract against the law, unless a law is violated while breaching the contract (i.e. fraud)

so by contrast you think the ever given being late against their delivery contract is illegal?

Mate, what do you think 'contract law' is?

what controls what thing can and cannot be in a contract

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