What is the law regarding early termination damages?

Question Details: I switched providers for my small business gas service. We decided to rescind and it was within the 10 business days they allowed us. Under the rescission clause, it was stated there would be no penalty, however they just sent us a bill stating that we owe thousands in early termination damages. Under the termination clause, it was stated that they called that termination damage a recovery cost that is not a penalty. Would I still owe the money if that cost was not made clear under the rescission clause?

Asked on 7/1/2019 under: Business Illinois

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SJZ, Member, New York Bar / FreeAdvice Contributing Attorney Answered 5 months ago | Contributor

If they are charging you what was in the contract as an amount--regardless of what it was called--they could get for early termination, then they can get this. The issue is not whether you personally understood it--i.e. whether it was clear to you--but rather whether the information was in the contract. If it was in the contract, you could be held to it, since the law presumes you read, understood, and agreed to what you sign. If it was not in the contract, however, they could not charge you.

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