Quote:
Originally Posted by SweetT
There are a few people in this thread offering you very sound advice, BP (Brad, Phil and a few others)....but there are still a few that think they know more than they really do and this is why you should seriously consult an attorney...not a criminal defense attorney but a corporate contract attorney.
My suggestion: Meet with an attorney and have them send a letter to NaviSite explaining that they have been retained to represent you in this matter and that any and all communication must now go through them. This will accomplish a few things...first, NaviSite will not be able to do ANYTHING in the court system without communicating with your attorney. Second, they will most likely stop harrasing you at all since they know that their scare tactics will not work on the attorney.
I think you are going to find that they look at your account and realize that it will not be worth taking to court over less than $10k and that will end your dealings with them. In addition, they have too many things that make this a bad case for them....first, the assumption of the contract by NaviSite is always questionable, secondly, most states do not allow for punitive damages, only liquidated damages, and they would be hard pressed to prove their liquidated damages in court for a contract that auto-renewed three times.
Probably the biggest downfall that they have right now is that they are hemorrhaging money and are probably going to lose a multi-million dollar judgment against a counter suit that started just like yours but for much, much, much more money. The entire company is only worth $10m, which is reportedly $5m LESS than they paid for Jupiter. These are the types of things that make you look at your situation and say "they probably have more important things to worry about than to come after a guy who has paid for the same server for 4 years"...but thats JMHO.
I would like to put one more thing out there for public consumption.....
Contracts are not as evil as some people would want you to believe. I dont do any business without a written contract. Contracts keep friends, friends. Where this gets into a bad area is when one friend assumes that since they are friends that they should not read the contract. I have contracts with MANY of my friends for projects that we are working on together...and every single time we would fight tooth and nail over every single point in the contract....but always with the same goal...to remain friends.
From a sheer hosting perspective, for years we never required agreements from our clients and we used the same reasoning that Brad used above...and I like doing business that way....but, as Brad eluded to in his post, once you reach a certain size that is simply not possible any longer. Once high end bankers, and credit facilities get involved then that all changes. That does not mean that the culture has to change...just the paperwork. I am happy to say that we have never, not once had a lawyer threaten anyone that signed a contract with us....and we dont plan to any time soon.
Good Luck, BP....and feel free to call me if I can be of any assistance to you.
--T
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Tony,
Very sage advice, but let me add some stuff from someone has been in hosting for a long time as well. Back in the day when hosting was really growing we (BBN/Genuity) changed out terms often for numerous reasons. . First off , when the contract reads 12 months , with only a month to month auto renewal the company is only allowed to project revenue for 13 Months, when the contract is 1 year auto renew you can actually project that as much as 2 yrs revenue to the street. (Back when such things mattered) I know that we , because of our competitive environment , did not do an auto renew mainly because our goal was to reach out to our customers one quarter prior to try to get them to commit to a higher level or more services. The risk with any contract especially during the Internet explosion was that the companies we were dealing with were all about getting sites up fast and then once they were up if they did not gte results they would try to cancel only a few months in , this is after we negotiated lease terms on equipment , which was not cheap at the time, and already committed man hours to expedite delivery of the site for them. In these cases we would commonly pursue relief for the entire terms of the contract , if only to recover our HW investment.
Now since you have no leverage here , since you fully intend not to move forward with this provider, collecting as much as possible is their only recourse. Once they add as much "fees" as they can, the next step is to tack on Legal fees once it gets coded as a 7 or 14 (collection codes) for Legal action , In this case the attorney now gets 1/3 of whatever is recovered and the company has written off the debt. In these cases the Attorney will usually approach with a settlement .50 on the dollar or something. If you can cut a good deal you may want to consider it, because in court it really looks like they got you, and the terms will absolutely hold up in court even if it was a week, or a day, does not matter, a deadline is a deadline.
I couldn't advise Tony's recommendations more ,just thought you'd want another view.