Buyer A will be 18 years old in 3 months. An avid model train collector, he sees an ad in a magazine for model trains. He calls the train company and asks about their product line and prices. The telemarketer tells Buyer A that all of their company's cars cost $60.00 including postage. She tells him that if he joins the "Train A Month Club" he will receive a train a month at a cost of $45.00 each. To qualify for that discount he must agree to accept and pay for a train each month for 12 consecutive months. He must also pay half the total contract price in advance. Buyer A agrees and sends a check for $270.00 to the train company. He receives his first train the same week.

Four months past and Buyer A is dissatisfied with the train company's products. He returns the fourth car by Fedex and sends the train company a handwritten letter saying that he no longer cares to participate in the "Train A Month Club" and he wants his money back. He also calls the train company and tells a telemarketer he wants out.

Questions:

If the train company sues Buyer A in small claims court, what are his defenses and will he get his money back?

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Originally Posted by CNJNLUV

Buyer A will be 18 years old in 3 months. An avid model train collector, he sees an ad in a magazine for model trains. He calls the train company and asks about their product line and prices. The telemarketer tells Buyer A that all of their company's cars cost $60.00 including postage. She tells him that if he joins the "Train A Month Club" he will receive a train a month at a cost of $45.00 each. To qualify for that discount he must agree to accept and pay for a train each month for 12 consecutive months. He must also pay half the total contract price in advance. Buyer A agrees and sends a check for $270.00 to the train company. He receives his first train the same week.

Four months past and Buyer A is dissatisfied with the train company's products. He returns the fourth car by Fedex and sends the train company a handwritten letter saying that he no longer cares to participate in the "Train A Month Club" and he wants his money back. He also calls the train company and tells a telemarketer he wants out.

Questions:

If the train company sues Buyer A in small claims court, what are his defenses and will he get his money back?

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For starters, considering the amount of money involved, it is unlikely the "Train A Month Club" would take this matter to Small Claims Court. If they were to do anything it is more likely they will list it on your credit record where it could remain until the matter is resolved or expunged by statute.

If it did go to court, and assuming there is no contract provision for early termination by a customer, here is how the courts often, but not always, look at such situations.

Because you cancelled the contract early you lose the discount and therefore owe a total of $180 for the three cars you kept. The supplier has your $270 but is entitled to some compensation for your breach of contract. Usually such compensation does not exceed the profits the company could have realized had the contract been fulfilled. (The court would be remiss to award them the full value of the contract since they haven't supplied the full inventory.) It is possible the monies they have kept will satisfy them in this regard.

As for you getting a refund anything is possible and we could speculate as to a multitude of possible outcomes based on various factors but the outcome we have described is, in our experience, the most likely.

With all that being said, we wouldn't rule out asking for a refund from the supplier. Many customer-focused companies will, on occasion, turn a blind eye to strict legal interpretations of consumer contracts and instead seek to maintain a good public image.

Hello CN:

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