What does the law stateabout charging a fee to a consumer for missing/cancelling service appointments?

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What does the law stateabout charging a fee to a consumer for missing/cancelling service appointments?

We sell satellite service and our service agreement that is signed prior to installation states that the customer must cancel appointment within 3 hours prior of scheduled installation time or they will be subject to a $175 charge, since we have to dispatch equipment and sub-contractors who still charge us for a trip charge once they have left. Many customers cancel at the door and the contract states we will charge the credit card on file if they cancel without appropriate notice. We have never charged anyone yet, but would like to know what the law says about having this business practice?

Asked on November 17, 2010 under Business Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

As long as the cancellation fee is disclosed to customers in advance, in some resonable way (e.g. not buried in tiny small print in obscure language, or only on your website on a rarely visited page) it is enforceable. If it's one of the terms of your service that you can show customers are--or at least, reasonably should be--aware of when they contract for your services, then it is an enforceable term. If it's in your service agreement, fairly prominently, and the agreement is signed in advance, then you should have good grounds to charge this fee, the same way many doctors and dentists will charge a fee if a patient cancels with too little notice, or a hotel can charge a night's stay if a customer doesn't cancel 24 hours in advance. It's all about showing that it was a known (or should  be known) term which people were made aware of prior to signing.


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