If I signed a contract for my child’s class and then lose my job, am I legally obligated to honor the conract?

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If I signed a contract for my child’s class and then lose my job, am I legally obligated to honor the conract?

I signed a contract to have my daughter take classes (Tae Kwon Do) 3 years ago. Shortly after I lost my job. I told the scholl, they did not want be to pull my child therefore, I continued for as long as I could afford to and then I had to stop sometime a year later. I just received a letter from collections and I am surprise since the school nvever reached out to me to settle. What can I do?

Asked on July 30, 2012 under Bankruptcy Law, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The fact you lost your job does not affect the validity of the contract. Contracts are not invalidated by one party's change in circumstances or finances. Most schools would have let you out of the contract in this situation, but they were not obligated or required to do so. You should review the contract, and see what its terms in regard to cancellation or termination are: if you cancelled or terminated in accordance with the contract, you would not be responsible for costs or fees from and after the point that you terminated the contract, and should have a good defense to any legal claim.

However, if the contract did not provide for any way for you to cancel or terminate it, or if it did, but you did not do so in accordance with the contract's provisions, you may be obligated. If you are, all you can do is either work out a settlement or pay in most cases; there are times you can fight the obligation, on grounds, for example, that there was something fraudulent or deceitful about the contract, or the other party has not acted in good faith, but that generally requires an attorney to do successfully. So if after reviewing the contract, it looks like you are still obligated under it, unless it's so much money that you'd be well served to hire a lawyer, it may be best to pay, or at least try very hard to settle.


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