Legal Question??
 

I made a verbal (phone) agreement with an oil company regarding my automatic oil delivery and cost per gallon contract on 1/9/12. My current contract expires 1/31/12. I have since changed my mind and want to use another provider. I called them to cancel the agreement today 1/19/12 and they claim that the verbal agreement is binding and I will be charged a substantial fee $399. They sent me a paper copy of the agreement dated 1/10/12 and want it signed and returned. I did not sign/return it. Am I bound to this verbal agreement even though the "renewed" contract has not even started yet?

Thanks

yup

I don't know much about law, but in most countries, including the US, the word is as binding as a writen contract. You are buying the oil.

You have 11 days left on the contract you can't wait

I disagree that you are legally obligated since you haven't signed anything. If its a lot of money talk to an attorney.

An old saying is "A verbal contract isn’t worth the paper it’s written on". Verbal contracts are a convenient and commonly used form of agreement between two parties. However, the main problem with a verbal contract is that if any problems should arise and there were no witnesses to the agreement, the case is reduced to one party's word against the others. Even if verbal contract law is followed, a verbal contract is often easily contested.

Yes. But in this case you have the protagonist (OP) writing what he has verbaly agreed to. By hes own testemony, it is clear what kind of verbal agreement both parties agreed upon. This might "just" be OSO, but what is written here, makes it very clear, that the buyer simply chose to make another decision after the initial purchase. In the case of this change, the seller is imo to be compensated for the loss. Ie, time spend, shipping ect. The buyer was avare of the price and it is up the buyer to seek what he or her finds to be the best deal before buying. You find a better price after the purchase, well, appeal to the seller of the product for a lower price, but you can't force it.

You have the right to rescind for 3 days. Unless the state voids fuel companies from this rule. Insurance co, car dealers and cell phone co are usually the only ones exempt since you are taking the product right away and they are in effect. You contract hasn't started so they havent covered you yet or made a delivery

sometimes fundemental honesty and intergrity are worth more than the contract. you made the deal. they acted in good faith and honestly. do the same. either honor the deal or buy your way out of it.

Raytart'
The Answer Is "no", You Are Not Bound By The Verbal Agreement! The Oil Company Delivers Oil Only After The Written Contract Is Signed.
This Is Their Normal Course Of Business.
The Only Thing The Oil Company Did Was To Make You An Offer! You Agreed To The Offer Subject To Reading The Contract. After Reading The Contract, You Changed Your Mind. Thats Perfectly Legal.
The Contract Was Never Executed!! Oil Has Not Been Delivered On The New Contract. Therefore An Agreement Was Never Made! No Charge, No Fee.
Wish The Oil Delivery Company A "good Day".
This Is How We Do Business In New York. I Know Because I Am In The Delivery Business In New York!!
Jeff-country Service Auto Transport, Inc.
O.p.a. Boat # 623

It was recorded thats what they did with me (general fuel) ..but if oil prices keep going up I cant see how they wouldnt let you out better for them, if they go down they will want money..

Sounds like I won't be making any verbal agreements with people from long island.. Just kidding but how embarrassing is that here on OSO we preach honoring your word then a member comes on here and he or she tells us they do not want to honor their word.

:bsflag:


Chris

That's not entirely true. What is being discussed here isn't "delivery," and it doesn't matter that they won't deliver or ship the oil until the written contract is signed. What's being discussed is whether or not a contract was formed (a contract is different than an "agreement"). To be exempt from this contract on its face the buyer would basically have to lie and say that they never made the deal in the first place, however, being subject to the oral contract and breaking it leaves the Buyer in the exact same place fundamentally - off of the hook.

I guaranty you there wasn't a liquidated damages provision in the oral contract, and the $399 cancellation fee wasn't part of the initial bargain. If the Buyer cancels and they try to collect he could always argue that he never agreed to a liquidated damages provision, and that it is unenforceable to him, forcing the oil company to prove their damages in court (and it would cost more for them to fight this than to let it go). So, ultimately, there was a contract, it is enforceable (but not with specific performance - making the Buyer actually purchase the oil), but it would cost the oil company more to fight the case than it would recover in damages so the Buyer should be off of the hook, and in no way should be the Buyer be subject to the $399 cancellation fee.

That's what I thought too - the $399 cancellation fee would have had to be part of the contract to be enforceable. I bet there is a credit card on file that will be getting a $399 charge to it pretty soon though unless something is done to stop it.

Let's reverse the roles here. Let's say you made a verbal agreement that you were very happy with, and a couple of days later the oil company calls you and says they changed their mind, the price is now double or they can't make your delivery schedule or something, but basically they want out of the contract.

Would you be pissed and raising hell with them saying you had a contact?

Legal or not, you made a deal with these guys, stand by it and switch next year.

I wouldn't have posted it on here. Could have played he said/she said, but now it's in writing.

I'm not an attorney, but in general I think you are bound by the contract. Its my understanding that written agreement requirements only apply to contracts that are longer than one year.

Is there any honor left anywhere?
And why does this seem to occur in boaters more than anything?

A career in law enforcement does not make me an attorney, but I have spent enough time in court with them to tell you #1 You are legally bound, a verbal contract is just as solid as a written. Your word is your signature and your honor. #2 The company has lawyers on salary for crap like this so they will have no problem hauling you to small claims court, depending on total $ of suit. #3 You will have to pay an attorney out of your pocket and you still will loose.

My advice, revert back to a dying trait amongst men in this country. Own up to your word, admit to yourself you screwed up and that you have learned a valuable life lesson here. Plus why burn a bridge, what if in two years they are the cheapest company around, you really think they will do business with you. If more people would just be responsible and honorable this nation would not be in such poor status.

Do you also now have an verbal agreement with this 2nd company, thinking you'd just call and cancel the one with the 1st company?

That's be a pickle, 2 verbal agreements.

I can tell you for a fact that your verbal agreement is binding. If they want to pursue this they CAN take you to court over it.

Thanks to all who commented here. Fact of the matter is that Co. #1 capped me at 4.59. Co. #2 capped me at 3.99. It just pisses me off that there could be such a difference. I told Co. #1 about Co.#2 price and they made no offer to at least meet in the middle seeing that I've been a loyal customer for a few years. And no I did not verbally agree with Co.#2 to anything. In fact, Co.#2 informed me that I would most likely not be able to get out of the verbal w/Co.#1. So..... I guess I'll man up so I don't have to listen to those who commented about honor. F- all these Oil Co. They're the ones ruining the economy. I'm switching to Gas.

Verbal agreement was recorded
Co#1 = Petro
Co#2 = General

YA you wouldn't want to hurt an oil company!

+1 to this, if the roles where reversed he'd be on here crying that he made a verbal agreement with the oil co and now they want to back out of it. now it IS in writing and yea, what about that credit card charge? I bet he'd lose in court.

There was no contract and no honor to be lost if they are over charging you. F*ck 'em.

I have to ask , why is the oil company Azz holes because YOU had a dumb azz attack ?????????? Just the way the world is today , it's alway's somebody else's fault.

3 pages about whether somebody should actually keep their end of a deal ? 10 posts that come up with some ridiculous justification for weasling your way out of a commitment you made ? geeze ... you give weasels a bad name...

you make a deal you stick to it or buy your self out of it. if you don't you are dishonest. no middle ground. no justification.

you are as bad as any slime ball that sells something on here takes the money and never ships it. your word is worth nothing.

Has oil already been delivered and not paid for? If not, I don't see how you are bound legally or morally. Your phone conversation only expressed intent. You changed your mind. Happens all the time. Some of the comparisons and condemnations on this thread are ridiculous. If oil has been delivered then you should pay. JMO

" i don't see how you are bound legall y or morally..."

that says it all... you don't see how making a commitment to do something obligates you ?

well... let THAT be a warning to anyone that you do business with

i would consult a lawyer, verbal contracts are different depending on where your standing and their standing. some states they are not legal, just precursor to writen contract. did you agree to volume or time period also, this may give you some workability to your oil usage. call lawyer that does "contract law"

Just google "Verbal Contracts". Most sites say they are legal, with certain conditions. Interesting read on these sites. According to the original post, verbal agreement with a price quoted, then a written contract sent for signature. Sounds like a true "Verbal Contract" and enforceable.

did they inform you at the time of the verbal agreement that there would be a penalty of 399 dollars to release you from your verbal agreement? and since you have been with this company for several years were you aware of this policy prior to the verbal agreement?

if so then you are definatley obligated.

if not it would seem that they would have a hard time collecting this fee. a party to a contract cant just interject fees and service charges whenever they see fit and at whatever amount suits them.

you know what you can afford and what you cant. dont listen to anyone on here telling you what "honor" is. your not screwing anyone by changing your mind. make your own decision. but definately consult a lawyer in your state prior to making any decisions. laws vary greatly from state to state.

some of you guys need to get a grip and gain some perspective....................... and maybe a little respect along the way. the issue is not if the agreement was made but if they have the right to collect a fee in the event of the cancelation of a verbal agreement.

This makes the most sense, and in this case they followed up with the written contract to explain all the fee's.

A written contract which they wanted signed after the fact.

Geezzz... All I did was ask a simple question and look what it turns into.



Just a few facts:

No credit card info was ever given over the coarse of the of the past few years contracts (At least I don't recall ever giving them one). I always payed by check after the deliveries. They would send me a bill. And I always pay my bills.

Contract terms are for 1 year. You have to purchase oil from them exclusively

When I contacted Co.#1 it was with the intentions of barganing with them based on the quote from Co.#2. and they were not willing to negotiate

I asked Co.#1 what they would do If I cancel. They said if I don't pay the $399, it would be turned over to "collections". Then it goes against my credit report and that's not good.

I'm not trying to weasle out!

And here's the most prevalent Fact:
At about 9:00 pm one evening, the phone rings and it's Co.#1 contacting me to let me know that my current contract is about to expire. They totally catch me off guard and proceed to tell me the terms of the new contract. It was a fairly lengthy mouthful that was read to me. I don't recall if they ever mentioned the cancellation fee / nor do I recall them saying anything about having time to think about it. But at the end of them reading the terms, I say "I'm not crazy about the price but OK I agree. Thank You and goodbye.
A few days go by, and I recieve a flyer in the mail from Co.#2. I give them a call to check out their pricing. Not only is the cost of oil cheaper on that day, but their cap is significantly less, They are also cheaper on the yearly service contract in the event that the oil burner/heating system fails. All sounds great. Let me call Co#1 and try to chew them down a bit seeing how the new contract is not yet in effect. No oil has been purchased under the new contract, so it's not like I'm trying to renage on something that has already been done.
In my Opinion, they catch me off guard and don't allow me any time to check out the competition is kind of a foul.

Shame on me for not telling them to send it to me in writing so I can look it over and then decide. I should have known better because they do this everytime the contract is up for renewal.

I'm going to stick with Co.#1 just to avoid the headache.
It's not about money now, they just pissed me off. Next year.... rest asurred I'll be changing to another company.

Three days right to cancel
 

Here in Michigan we have three business days to cancel. If it was me I would call company #1 and tell them that they have the right to match company #2's price. If they don't like it too bad. If they wasted there time to make a bad credit report I would sue them. I am a business owner and if I quoted a job and the customer called up and told me he got a better price ( even if I had a signed contract - as long as NO product was purchased ) I would concider it void but would try to resell or rework my price. It wouldn't be good for my name if I went after someone over something as petty as this. If the oil company went after YOU for this I would make it a part time job to smear them.

Raytart: how much you figure you will overpay with Co. 1 vs. Co. 2 over the next year?

Not sure. I figure that its just a matter of time that I will be charged the "Cap" price. Seeing how crude is in the upswing.
I really don't keep a record of how many gallons I use.
But last year (2011) from Jan thru Dec I spent $3704 on home heating oil. I would have to estimate 1000 gallons.
So, at differance of 60 cent that comes out to $600 over the 1 year period, assuming that I use the same amount of fuel as last year.
I forgot to mention that Co.#2 will give me a $100 credit for the first purchase as a new customer incentive. Plus the $30 differance in the cost of the Burner insurance plan.
Like I stated in an earlier post, It's not a tremendous amount, it's just the principle of them not being willing to renegotiate. Now they left a bad taste and I would not reccommend or reuse them.

I understand, hopefully with the warm weather this winter so far you'll be a bit less.

My annual cost for natural gas here in WI is ~1000-1100. 2300 sq ft multi-level home.

Inform them in a polite manner you will agree (if that's your decision) and will never use them again in the future if they can't work with you.