expiration legal when clients prepay a discounted price for services

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expiration legal when clients prepay a discounted price for services

I offer pre-paid discount packages for my services. They expire 6 months from the date of purchase and are nonrefundable. These packages are very popular. For example, my hourly rate is $70. If a client prepays for 12 hours, the discounted price is $660, making the hourly right $55/hour. Expiration information is stated in my client agreement which they sign. Is it legal to have these prepaid packages expire? There are a few clients, each year, who don’t use up the hours purchased. I call, text and email to remind them but they don’t return my messages.

Asked on May 9, 2018 under Business Law, Wisconsin

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Yes, it is legal so long as clients are provided with notice of the expiration date prior to them buying the packages. If you have this in your agreement, you should be fine, though the best practice would be to make notice of the expiration date very prominent in the agreement--e.g. in a larger font, bold, and/or all caps.


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