How to Protect Yourself from Illegal Contracts

Are your contracts legal?

Are you involved in a coaching or other program that you had to sign a contract for?

Or, are you trying to get out of a contract and you’re being told you must pay the full amount of your contract even though you will no longer have access to the program and coaching?

There has been a lot of contract abuse by people in the coaching community and it is hurting a lot of people. If this is affecting your life listen up because I am going to give you some tools to fight back and keep your money.

We need to work together to stop contract abuse by unscrupulous, unethical, and dishonest coaches and business owners.

I have been wanting to talk about this topic for a while because of a troubling practice I see with many coaches and business owners in the online space regarding how they are using contracts as an extortion tool to force their clients to pay.

A few months ago I received an email from a group called ‘Team Irvine’.  This is the company of Dr. Shannon Irvine, who practices neuroscience. The email demanded payment in full for a contract I was a signator to, claiming I was in arrears and if I did not pay up immediately I would be subject to collections which means that would be reflected on my credit report.

Here’s the problem. I am not a client or a customer of Dr. Irvine. I have never purchased anything from her and I never signed a contract. I replied to the email demanding proof of this transaction and letting her know that it was illegal to send harassing demand letters and if I learned that they accessed my credit report or reported me to a collections agency I would be seeing them in court. I also let her team know that her demand letter was illegal and violated the tenants of contract law.

Her team replied saying it was a glitch in their email system, that they were trying to fix the problem and that I should ignore the email. Ignore it? Without finding out if they were reporting me to a collections agency and accessing my credit report? I don’t think so.

And I could ignore it but what about those people who were being harassed by Dr. Irvine’s team, who were in arrears on their contract payments and who faced collections? What were they going to do? What was their defense against this illegal demand for payment, even if they did sign a contract.

Why should you listen to my opinion about this? Because I was a paralegal for 10 years, 3 of them for a prominent contract lawyer who is the best in the field. I learned a lot in that job and it has saved me a lot of headache, time, and money. I know an illegal contract when I see it and further, I know an illegal collections attempt, which this email from Dr. Irvine represented.

So I did what we do today – I made some videos about it, posted it on social media, and let everyone know about contracts and contract law. I’m sharing it in this podcast because there is so much abuse in this area, by people who ought to know better, and consumers need to be educated.

There were 3 problems  with Dr. irvine’s demand email. First,  I was not a customer and they had no right to send me a demand letter, which can hardly be accidental. I am an expert in technology and I know how these emails are created. There is no way this was just randomly sent out by Dr. Irvine’s support system, she uses FreshDesk. Normally paying customers would be on a unique list and they would not get emails send to subscribers. I was a subscriber at the time but I had never purchased anything.

Second, a collections threat is a serious matter and this should have been handled by mail, not by email. Team Irvine should have sent a certified letter with return receipt to the people they are threatening with collections, not an email. It’s more official and there is evidence that they received the letter because they have to sign for it.

I get hundreds of emails a day and some get lost. How are they going to know that the customer received and opened the email? Have you ever missed an email because it went to your spam folder or got buried? That was another bad move on their part. Maybe they didn’t want to spend $5 to send the certified letter.

Third, and this is the salient point in this matter, their demand letter put them in breach of their own contract. When you sign a contract for services, you offer to pay for a service you will receive. When you have received the service under the terms of the contract, the contract is complete. Most of these incompetent and unethical coaches and program providers use contracts as a means of securing payment but they are a party to the contract too.

Yes, a contract guarantees payment but that payment is conditional upon the other person fulfilling their side of the contract too. There are two parties to a contract and both have contractual obligations to fulfill or the contract is not valid. These coaches who use contracts as a means of threatening their customers to pay their contracts in full, irrespective of what they are legally obligated to deliver under the terms of the contract, are committing fraud and that make their entire contract illegal.

Who is doing this? Look up the reviews and complaints for some of the ‘business coaches’ you see in social media ads and you’ll see the premiere, 8 figure, successful coaches among the worst offenders. I have helped at least a dozen people successfully avoid paying out for what amounts to extortion by pointing out that the ‘coach’ wasn’t fulfilling their part of the contract and therefore any attempts to claim money they were not owed, under the terms of their own contract, were fraudulent.

Here is what I mean. If I sign a contract for 12 months of coaching and a variety of services that are to be delivered over a 12 month period, I am paying for access to the 12 full months of coaching and services and the provider or business I am working with, is legally obligated to provide a full 12 months of coaching and services.

I must receive all of those services for the contract to be fully valid and they must deliver all of those services specified in the contract for it to be valid. If I cancel the contract for any reason – and there are reasons for contract cancellation like a material change in circumstances, you get sick, lose your job, have to move, suffer a loss like a fire, etc. – I am only obligated to pay for the services that I use and that have been delivered.

Do you see what I mean?

If a business tries to make you pay the full value of the contract even though they have not delivered the services you will be paying for, like access to a program and other services provided for in the contract you signed, they are engaging in fraud.

Every contract should have a cancellation or termination clause in it to be fully enforceable.  Things happen, life happens, accidents happen, and ethical people recognize that.

But here’s where you see the illegality – when these coaches and program providers want you to pay in full when you cancel, they are violating their part of the contract because they have no intention of giving you the services you are paying for. They are not fulfilling their part of the contract and that makes it null and void.

Furthermore, because they intended to enforce the contract in that way, the entire contract is illegal because that is fraud. It is fraud to create a contract that obligates the customer to pay for services that you have no intention of providing and trying to enforce that contract by threat of legal action. That is harassment.

And finally, one more problem with this letter and the situation, because access is terminated for non- payment, you are not stealing anything or using services you did not pay for. Believe me, I run programs like this and as soon as a payment does not go through your access is gone – it is all automated.

It is unfortunate that so many people call themselves business coaches and they do not know anything about business, they use contracts to enforce bad procedures, and they threaten and harass customers who cannot pay them. Any contract that does not allow for a change in material circumstances, that does not recognize that sometimes in spite of their best intentions things happen and people need a break. When you have a time sensitive program, like a 12 month coaching program, you do not get access to all of the material all at once so you are not getting something you did not pay for. And if you must cancel because of a change in material circumstances you should not have to pay and legally you do not have to pay.

So if this has struck a chord with you or you know someone who is harassed and threatened by an unethical business owner, coach, program manager, or someone like Dr. Irvine, share this podcast with them. The more you know the better you can protect yourself and this is a process that must stop.

Unfortunately it won’t stop until customers start fighting back and refusing to be taken advantage of in this way.

It doesn’t matter what people say they make, who they say they are, how big they say their audience is, if they are trying to enforce illegal contracts they are not a good option for you. Everyone from the ‘8 figure business coach’ to those who ‘empower women to lead themselves’ – they all use contracts this way and unless we send a strong message they won’t stop because as long as they can intimidate, harass, and threaten their customers to pay and they do, they think they are doing what is best for their business.

And it is not.

So get empowered with knowledge and next time you are signing a contract be sure to look for a termination clause and read it carefully, and point out that if you have to cancel that you have no legal obligation to pay in full if they are not going to fulfill their part of the contract. Remember, a contract has two parties and two sets of obligations and if they are not going to give you what you pay for then you do not have to pay.

If you are a coach who is using contracts harass, intimidate, and threaten your customers to make full payment when they cancel a contract, be aware that what you are doing is wrong, it is illegal, and you will get sued one day or investigated by your state attorney general and they will let you know what happens when you break the law by creating fraudulent contracts.

Listen to the Copyright Extortion podcast at this link.