Hacker News Reader

Comment by IanCal | Hacker News Reader

He won the first one, which left him only having to pay off the amount he owed (no cancellation fees). I hope he doesn't win the second one, as I'd expect ridiculous fees to be unenforceable on either side.

If a massive credit card agreement had a cancellation fee of $10, I'd expect to have to pay it. If the fee was $200,000 then I'd expect a court to say "Don't take the piss".

Just like we keep arguing that ridiculous terms in EULAs shouldn't be enforceable even if someone clicked ok, the bank shouldn't be held to this.

The contract was deemed valid though, which I think is awesome.

View on HN

You mean, like the people in the US weren't responsible for having signed a terrible home-loan agreement and then loose everything?

I know this is Russia, not the US, and law does not apply to the same extent, but I still hope the man wins.

How did you draw the conclusion that the "law doesn't apply to the same extent" as the USA?

Russia just does not have a reputation where the rule of law is the primary factor in the way governments and the courts operate.

cf. also the following:

* http://www.cato.org/events/rule-law-russia * http://www.reuters.com/article/2011/05/20/russia-medvedev-id... * http://www.freedomhouse.org/article/state-human-rights-and-r... * http://online.wsj.com/article/SB1000142405274870377570457616... (Google URL and use Referer: information to view)

I'm sure others could come up with more sources too.

Lending someone the money to buy X, where your collateral is X is quite different from assigning a several hundred thousand dollar charge to the cancellation of a credit card. If you honestly don't think that's the case then I don't really know how to continue.

In the UK, if bank fees are excessive we can take it to the Financial Ombudsman service. There is supposed to be a level of fairness.

> but I still hope the man wins.

I don't. If he did, then it would make it ok for the bank to do exactly the same thing.

Just like we keep arguing that ridiculous terms in EULAs shouldn't be enforceable even if someone clicked ok

IANAL, but I believe the general legal (as opposed to moral) arguments for ridiculous clauses being unenforceable is that contracts of adhesion face a strict inspection for unconscionability along with the suspicion that there might not be a true meeting of the minds if circumstances made it unlikely for one party to even be aware of what they were agreeing to.

Which applies quite clearly here. They sent out a contract, and received a different one back. I wonder if he contacted them and added a letter saying "I have changed the following terms..."

I don't think you can argue that the bank was aware of what they were agreeing to.

But the bank as a company should be expected to know what it signs and so should not be protected from abusive clauses.

I disagree. Penalty clauses* have been unenforceable at common law for long before actual consumer protection legislation was even thought of. I'd be pretty leery of destroying such a good principle, backed by centuries of common law contractual tradition, just to single out banks and make penalty clauses enforceable against them.

*Penalty clauses are ones that specify excessive damages, to punish someone who breaches a contract -- as opposed to "liquidated damages" clauses, that specify damages which pre-estimate the loss that you'll suffer if I breach the contract, which are allowed.

Thanks for the informed comment.

So OK penalty clauses are really abusives but what about simply granting oneself favorable terms (like guaranteed interest rates, free services, etc.) ?

> But the bank as a company should be expected to know what it signs

I disagree. This is one of those instances where I believe it's more important to preserve an equitable standard rather than penalize someone simply for being bigger.

Let's say hypothetically that the courts agree with you, and that in Russia the legal system is strongly based on precedent as it is in the US (I don't know anything about the Russian legal system).

Would any company be exposed to this manner of small-print tweaking? Would this include LLCs as well as corporations?

What if an office supplier injects ridiculous terms into an agreement it signs with a corner grocery store, imposing 6 figure termination fees, and prices that increase exponentially every week? How about a web hosting agreement between a hosting provider and a startup, granting the hosting provider full IP rights to anything hosted on their servers?

These may not appear to be comparable to the David & Goliath-esque situation of a credit company and an individual, but I'm pretty sure this is not really a can of worms anyone wants to open.

>in Russia the legal system is strongly based on precedent

It's not. Russian legal system is based on codes. http://en.wikipedia.org/wiki/Law_of_Russia

Reply on news.ycombinator.com