4 ms·

It's really interesting to watch how much of HN armchair lawyers this and assumes it will not hold up for, well, no apparent legal reason that i can see. With

It's really interesting to watch how much of HN armchair lawyers this and assumes it will not hold up for, well, no apparent legal reason that i can see. With my actual lawyer hat on, I'll place my bet on the other side - This is not a non-compete, and these clauses are quite commonplace in almost all placement agencies (IE nannies, employees, etc). Charging a fee to facilitate two people meeting and making a transaction is perfectly normal, and I'm not aware of any court striking them down. In fact, the opposite - i'm aware of plenty of court cases of employers recovering placement fees, etc, from employees, for example. The only prohibition i'm aware of in california is payment of fees to unlicensed real estate agents for things licensed real estate agents would normally do. The only interesting restriction you will find on recovery is whether the agency (wag here) was compliant with relveant licensing/etc statutes, and whether the two people actually met using wag. If they did, ... Folks are welcome to meet through other means, and it does not restrict anyone working for anyone.

steviecleveland 7y ago
Just like Wag!, you're not wrong, you're just wrong.
manfredo 7y ago
I think it won't hold up. Not for legal reasons, but for economic reasons. Say they don't pay the $1,000. What is Wag going to do? Sue the customer? Wags has no collateral that they can repossess. Taking the customer to court will almost certainly cost more than $1,000. If the cost of collecting this fee is greater than the fee itself then it's not in the company's interest to enforce it when customers refuse to pay. The result is that the fee effectively becomes optional.
- DannyBee 7y ago
  Err, plenty of these agencies have enforced against their customers. They won't end up in court, but binding arbitration. They will make an example of a few people and the rest will fall in line or run away, as per usual. They are more likely to enforce against the dog walkers than random customers. The customers will not care about that enforcement, it will be relatively effective in achieving their goal, etc. In practice, they will most likely use this clause to prevent organized abuse, etc. Remember also that you agree upfront to let them charge you. So it is going to be you who has to try to get the money back. (You will not likely win a CC dispute here)
  - ggm 7y ago
    the rest will fall in line or run away Not a lawyer, not an economist, but this feels like the law of unintended consequences writ large: Sue your customers and they run away means you have no future customer and your business tanks.
  - manfredo 7y ago
    A customer blocks all charges to their credit card from Wags and cancels their service. Wags issues a fine to a customer. The customer doesn't pay. Wags tries to bring the customer to arbitration. The customer gives no response. What happens then? Wags could use a collections agency, but they'll only get a fraction of that money back. Not to mention arbitration usually costs hundreds of dollars per hour, with usually one hour (or longer) minimum, so I'm dubious they'll even bother going to arbitration.
- tgsovlerkhgsel 7y ago
  Threaten both sides with expensive litigation if they don't stop, hoping that one of them will get cold feet, forcing the other to find another customer/dog walker. Just having the term there is enough to act as a chilling effect, which is all they need. They might also occasionally take a customer to court, at a loss, to scare others.
- palunon 7y ago
  Can't they also sue for legal fees ? (Non US non lawyer here, but in my country awarding lawyer and court fees is pretty much automatic if you win)
  - manfredo 7y ago
    I'm no lawyer either, but my understanding is that the defendant can try and get the plaintiff to pay for legal costs if they can prove that this was a strategic lawsuit (as in, the plaintiff sued for the primary purpose of coercing the defendant). Since Wag! would be the plaintiff here, I don't think they could recoup any fees.

steviecleveland 7y ago

Just like Wag!, you're not wrong, you're just wrong.

manfredo 7y ago

I think it won't hold up. Not for legal reasons, but for economic reasons. Say they don't pay the $1,000. What is Wag going to do? Sue the customer? Wags has no collateral that they can repossess. Taking the customer to court will almost certainly cost more than $1,000. If the cost of collecting this fee is greater than the fee itself then it's not in the company's interest to enforce it when customers refuse to pay. The result is that the fee effectively becomes optional.

DannyBee 7y ago
Err, plenty of these agencies have enforced against their customers. They won't end up in court, but binding arbitration. They will make an example of a few people and the rest will fall in line or run away, as per usual. They are more likely to enforce against the dog walkers than random customers. The customers will not care about that enforcement, it will be relatively effective in achieving their goal, etc. In practice, they will most likely use this clause to prevent organized abuse, etc. Remember also that you agree upfront to let them charge you. So it is going to be you who has to try to get the money back. (You will not likely win a CC dispute here)
- ggm 7y ago
  the rest will fall in line or run away Not a lawyer, not an economist, but this feels like the law of unintended consequences writ large: Sue your customers and they run away means you have no future customer and your business tanks.
- manfredo 7y ago
  A customer blocks all charges to their credit card from Wags and cancels their service. Wags issues a fine to a customer. The customer doesn't pay. Wags tries to bring the customer to arbitration. The customer gives no response. What happens then? Wags could use a collections agency, but they'll only get a fraction of that money back. Not to mention arbitration usually costs hundreds of dollars per hour, with usually one hour (or longer) minimum, so I'm dubious they'll even bother going to arbitration.
tgsovlerkhgsel 7y ago
Threaten both sides with expensive litigation if they don't stop, hoping that one of them will get cold feet, forcing the other to find another customer/dog walker. Just having the term there is enough to act as a chilling effect, which is all they need. They might also occasionally take a customer to court, at a loss, to scare others.
palunon 7y ago
Can't they also sue for legal fees ? (Non US non lawyer here, but in my country awarding lawyer and court fees is pretty much automatic if you win)
- manfredo 7y ago
  I'm no lawyer either, but my understanding is that the defendant can try and get the plaintiff to pay for legal costs if they can prove that this was a strategic lawsuit (as in, the plaintiff sued for the primary purpose of coercing the defendant). Since Wag! would be the plaintiff here, I don't think they could recoup any fees.