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Question about "Material Adverse Effect" term in consumer services contract

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Old May 25th, 2008, 02:40 AM     #1
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Default Question about "Material Adverse Effect" term in consumer services contract

Verizon Wireless recently increased their monthly administrative fees from $.70 to $.85. According to a discussion at ALIVE AGAIN! Get Out Of Verizon Wireless ETF For Free! New one (Not Because of Texting) - SlickDeals.net Forums, this change allows the customer to cancel their service contract without paying an early termination fee due to the following clause of the Customer Service Agreement:

Your service is subject to our business policies, practices and procedures, which we can change without notice. UNLESS OTHERWISE PROHIBITED BY LAW, WE CAN ALSO CHANGE PRICES AND ANY OTHER CONDITIONS IN THIS AGREEMENT AT ANY TIME BY SENDING YOU WRITTEN NOTICE PRIOR TO THE BILLING PERIOD IN WHICH THE CHANGES WOULD GO INTO EFFECT. IF YOU CHOOSE TO USE YOUR SERVICE AFTER THAT POINT, YOU’RE ACCEPTING THE CHANGES. IF THE CHANGES HAVE A MATERIAL ADVERSE EFFECT ON YOU, HOWEVER, YOU CAN END THE AFFECTED SERVICE, WITHOUT ANY EARLY TERMINATION FEE, JUST BY CALLING US WITHIN 60 DAYS AFTER WE SEND NOTICE OF THE CHANGE.

Some discussion on the abovementioned internet forum has construed that the term "material adverse effect" only requires that the effect be detrimental to the customer in an objectively measurable way. However, this claim is not supported by any citations to statute or case law. What standard does case law and/or statute establish for an effect to meet the "material adverse" condition?

Last edited by top_admin : May 26th, 2008 at 12:28 AM. Reason: link fixed
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