Arguing the toss - driving down the photocopier dealer's damages claim

So you want to terminate your photocopier or printer service agreement early? Perhaps you have no choice - your company is downsizing.

Your smiley and unscrupulous copier dealer will now try to hit you with a large bill, normally the average of the preceding 6 months spend, multiplied by the remainder of months left in the term. Some dealers may discount this number by up to 60%.

But is this really a reasonable approach?

The problem is this - because of the lack of precedents and the fact that, in most cases, contracts have been signed by equal parties, it is very unlikely that a judge will intervene. However, if you do choose to go to court, or fight through the mediation process, here are a few things it is useful to consider doing. At the very least, they should cast doubt on the supplier's claim.

Firstly, a common misconception is that the loss the dealer is entitled to claim for is the loss he has incurred - stuff he will have to pay for.

That's incorrect. The law (which, when it comes to photocopier or printer service agreements, is a total ass) seeks to put the other party (your smiley copier dealer) into the position he would have been in had the contract been fulfilled. That is, he is entitled to the profit he would have earned.

So he will try to argue that his business is very, very profitable

Take Clarity Copiers, for example. Their standard terms say that they will calculate their damages based on 40% of average use over the preceding 6 months, times the period remaining. In other words, they are saying to a judge that their profit margin is 40%.

So some tactics that can help:

1. Get hold of other copier contracts from other suppliers and use those that have lesser terms to argue that as margins are fairly standard, your own supplier is exaggerating

2. Get hold of some manufacturers and ask them to confirm what normal profit margins are see in the sales channel

3. Get hold (if you are in the UK) of the latest Finance and Leasing Association Guidelines

None of this will win you the argument in a court of law, but you are aiming to prove that the supplier is overstating his claim, and if you can create doubt in his mind, you will probably be able to negotiate the settlement downwards.

As ever, if you need advice, please get in touch.