
Russian Man Changes Small Print in Credit Card Agreement, Then Sues - nickkyit
http://www.minyanville.com/business-news/editors-pick/articles/A-Russian-Bank-Is-Sued-for/8/7/2013/id/51205
======
eksith
Technically, the man did nothing wrong. His bank agreed to the altered terms.

I've seen some credit card and bank card forms that include language which
make the agreement void if its terms are altered in any way, but if it doesn't
have that, there's nothing really stopping you from doing the same.

That said, legal teams for credit card companies and banks are notorious for
finding ways to beat you with technicalities and/or drag their feet through
the court system so your own bills rack up. They can claim bad faith, and/or
fraud (which is a hot button) and add to the mix a DA willing to create a name
for him/herself by putting away a scumbag white-collar "criminal" (I.E. Joe,
the Photoshop user) and you've got a lot of risk behind it.

~~~
jarrett
I'm going to comment as if the same thing hypothetically happened in the US,
because I have no idea what Russian contract law is like.

Regarding criminal fraud: That might be tough to prove. See, for example, this
part of Virginia's fraud law:

[http://leg1.state.va.us/cgi-
bin/legp504.exe?000+cod+18.2-178](http://leg1.state.va.us/cgi-
bin/legp504.exe?000+cod+18.2-178)

Note that merely obtaining a _signature_ under false pretenses is a crime. Of
course, the definition of "false pretenses" is the sticking point.
Technically, the customer did not make any false representations. It seems he
merely expected the bank not to notice his "proposed" contractual changes.
That would not seem to satisfy the elements of the crime, though I wouldn't
bet my own freedom on that.

Regarding bad faith: It would be interesting to see if the court would find a
breach of the implied covenant of good faith and fair dealing. It's iffy.
Generally, such a breach would arise from either party's conduct _outside_ the
signing of the contract itself. I.e. you do something underhanded to thwart
the other party's enjoyment of his contractual rights, without breaching any
specific term in the contract.

Could a breach of the implied covenant arise from the negotiation process
itself? In my cursory search, I didn't come across any cases like that, but
they could exist. In this case, there does seem to be some willful deception
on the customer's part. One could argue, based on the circumstances, that he
expected the bank not to notice his alterations. Perhaps this would be
considered bad faith.

One could also argue that the contract is void as there was no meeting of the
minds. This can be a difficult case to make when there is a written contract.
Nonetheless, in unusual circumstances, which this appears to be, a written
contract can be voided for this reason. Here, one could argue that the two
parties thought they were signing contracts containing radically different
text, and thus there was no meeting of the minds.

Note that you can't just claim this any time you want to get out of a written
contract. The default assumption is that your signature indicates you read and
understood the contract. You have to show some unusual circumstance--such as
one party's surreptitious alteration prior to signing--if you want to claim
there was no meeting of the minds. And even then, a win is far from
guaranteed.

~~~
eridius
Under normal circumstances, there is no negotiation when a bank sends you a
credit card application. They expect you to just fill it out and send it back
unaltered. Since this is the expected way to handle credit card application
contracts, I expect the bank could easily argue that there was no meeting of
the minds, as they could not have been expected to re-read the entire contract
looking for alterations, and in fact it's reasonable to argue that the man who
altered the contract did so knowing the bank would never notice.

~~~
pbhjpbhj
> _they could not have been expected to re-read the entire contract looking
> for alterations_ //

I don't think a bank will want to go down the line of arguing the contract
shouldn't be binding because they shouldn't have to read the small print -
that sounds like an overall loss for the bank in general.

~~~
smsm42
The argument is not that you shouldn't read the small print - the bank lawyers
know what the small print means - the argument is that they can't look for
tiny changes in known small print if they're reasonably expecting it to be
identical to what they sent.

That's like I would initiate a contract with you and after we read it together
and you agree it's what you want to sign I covertly slip a page into the pack
that completely changes the terms and trick you into signing it without you
actually knowing it's there. You can reasonably claim you intended to sign the
original one, not the one I secretly modified - and I expect the court be more
sympathetic to you than to my claims "you should have watched my hands all the
time!" Of course, it'd require you proving that I did this, but if you can,
your case sounds pretty strong to me.

~~~
krichman
Slipping in an extra paper is not the same at all; you are adding terms to the
contract that the signer could not possibly have seen. By changing the small
print you are being sneaky, but they had a chance to fully examine what they
were agreeing to and were lax in that.

------
oh_teh_meows
Deep down I really want this man to win his case, if only just to show the
flaw in fine prints that have screwed over many legally-challenged (for lack
of a better term) people. You can argue that it's one's responsibility to look
out for, read, and understand fine prints in any contract one signs, but then
why are they in fine print in the first place? So as to not detract one's
attention from the borderline dishonest big prints like INTEREST FREE LOAN* or
something like that? So that you can make money off that few unfortunate souls
who overlooked the fine prints?

~~~
IanCal
He won the first one, which left him only having to pay off the amount he owed
(no cancellation fees). I hope he doesn't win the second one, as I'd expect
ridiculous fees to be unenforceable on _either_ side.

If a massive credit card agreement had a cancellation fee of $10, I'd expect
to have to pay it. If the fee was $200,000 then I'd expect a court to say
"Don't take the piss".

Just like we keep arguing that ridiculous terms in EULAs shouldn't be
enforceable _even if someone clicked ok_ , the bank shouldn't be held to this.

The contract _was_ deemed valid though, which I think is awesome.

~~~
tomp
You mean, like the people in the US weren't responsible for having signed a
terrible home-loan agreement and then loose everything?

I know this is Russia, not the US, and law does not apply to the same extent,
but I still hope the man wins.

~~~
darrhiggs
How did you draw the conclusion that the "law doesn't apply to the same
extent" as the USA?

~~~
fennecfoxen
Russia just does not have a reputation where the rule of law is the primary
factor in the way governments and the courts operate.

cf. also the following:

* [http://www.cato.org/events/rule-law-russia](http://www.cato.org/events/rule-law-russia) * [http://www.reuters.com/article/2011/05/20/russia-medvedev-id...](http://www.reuters.com/article/2011/05/20/russia-medvedev-idUSLDE74J0SM20110520) * [http://www.freedomhouse.org/article/state-human-rights-and-r...](http://www.freedomhouse.org/article/state-human-rights-and-rule-law-russia-us-policy-options) * [http://online.wsj.com/article/SB1000142405274870377570457616...](http://online.wsj.com/article/SB10001424052748703775704576161891700626876.html) (Google URL and use Referer: information to view)

I'm sure others could come up with more sources too.

------
dschiptsov
There is something to be understood about modern Russian culture - being
successful cheater and uncaught thief considered a virtue, praised in a
folklore with an iconic characters as Ostap Bender or, on a lower level,
untouchable criminals, so-called Thiefs-Above-Law.

The unprecedented level of corruption in Russia is in a large extent due to
this cultural beliefs. Being a successful bureaucrat or corrupted official is
a dream of millions, be it a student of Academy of Government Service, or just
a novice applied for a job of a traffic cop.

Most of so-called businesses are based on a fraud, designed and set up with
the fraud in mind, as an exit strategy, based on exploitation of minorities,
cheating of naive and uneducated and banal brute force.

Of course, such thing happen all over the US or other countries, the
difference is the percentage. In Russia cheating and fraud are dominant
strategies due to lack of any real economy or production.

The dream of easy money makes us the world largest porn producer, malware
manufacturer (nothing very clever, just primitive deception) and a world's
leader in drugs usage. We are deliberately copying, adapting and sometimes
creatively enhancing all the possible ponzi schemes, corporate frauds found in
US, without trying to mimic anything decent.

So, nothing to see here, yet another punk inspired by the cult books about
Ostap Bender.

btw, these cards of Tinkoff Credit Systems was a nice cheating in itself - in
a small print there was whopping 35% interest rate, huge fees for cancellation
and inability to pay back ahead of schedule.)) So, they worth each other.

~~~
kzrdude
> There is something to be understood about modern Russian culture - being
> successful cheater and uncaught thief considered a virtue, praised in a
> folklore with an iconic characters as Ostap Bender or, on a lower level,
> untouchable criminals, so-called Thiefs-Above-Law.

This appears many in unequal or unjust countries in the world (for example
North Africa), and it is easy to understand: When the powers that be are not
seen as just, it's easy to motivate cheating against their rules.

------
smoyer
I did something similar with the non-compete and non-disclosure agreements my
employer wanted me to sign when our company was purchased. It was a four page
document and I simply altered the terms to suit what I thought was fair (I had
no intention of stealing their IP, but I also didn't want them owning
everything I created).

The HR representative signed both copies, gave me one and filed the other. The
funniest part is that when I left a few years later, they couldn't find the
one I'd signed and asked me to sign another during the exit interview ... I
declined ;)

~~~
gesman
If they didn't initial these handmade changes (but rather just missed them) -
i think they wouldn't be enforcable. They "lost their copy" likely for this
purpose - so that they could argue that you "added changes" after the contract
was signed.

~~~
jasonkolb
Is there a legal basis for this? I do this all the time, if I'm given a stock
form to sign and I don't like it I just change it--it's much easier than
trying to get it changed by them. Most employees don't care and don't know how
to handle something like this so they just process it normally.

~~~
gesman
Without other side consciously agreeing to your changes via initials - this is
alike to graffiti on the wall. Fun for artist - little nuisance (not much
more) for building owner.

~~~
pbhjpbhj
But then you haven't agreed to the original contract and the contract would be
entirely void, no?

It seems strange that an otherwise legal contract signed by both parties would
be void based on the agreed content when signed.

~~~
jasonkolb
That's what I think as well. It's either null and void or my changes apply--
I'm good either way.

------
mrt0mat0
If you as a customer are held accountable for fine print that you never read,
why isn't the reverse? This should be a no-brainer if you ask me. Hypocrites

~~~
msandford
The bank is going to argue that he forged documents. They'll probably win not
because he is in the wrong but because of the (quite proper) turmoil that
would result. It's a rare judge that'll uphold the rule of law when it might
be inconvenient for big institutions.

~~~
IanCal
If the same thing that happened in reverse, what would you expect to happen?

Lets say that you were given some terms and conditions to read, the and the
bank swapped them out for others just before you signed. The new terms contain
a condition that you must pay them several hundred thousand dollars instead of
10.

Which way would you expect the court to rule? Which way do you think it
should?

~~~
SEMW
At common law, the heart of a contract is consensus 'ad idem' \- agreement to
the same thing. I can only enforce a contract against you if a reasonable
person in my position, at the time of contracting, would have believed that
you had accepted the contract (including the same terms that I want to
enforce).

Usually, having a written contract that both parties sign means that
condition's easily met. But pretty clearly, swapping some small print out just
before you sign might undermine that, depending on the situation. See e.g.
Hartog v Colin & Shields [1939] 3 All ER 56.

(Obviously, this is irrelevant to the person in the article, as Russia is not
a common-law country. And I don't know if it's relevant to American HN readers
either: my possibly flawed understanding (as a Brit) is that most consumer
contracts in the US are not governed by common law, but by the UCC, of which I
know nothing).

~~~
scotty79
How can you prove belief? Test by fire?

~~~
SEMW
That's the beauty of using objective (rather than subjective) intent as the
test. You don't need to prove belief. Subjective belief is irrelevant. What
you need is objective facts, and a court that pretends it's a reasonable
person in the position of e.g. the offeree, knowing everything they knew, and
decides what _it_ would have understood by the offer.

The point is: you interpret words as they'd be understood by a reasonable
person in the position of whoever the words were spoken to, _not_ as they were
understood by the person who spoke them.

E.g. consider the Hartog case. Key sentence: "...the plaintiff could not
reasonably have supposed that that offer contained the offerers' real
intention." ("Could not reasonably have supposed" is legal shorthand for "A
reasonable person in their position would not have supposed"). If they had
genuinely thought that the offeror meant it, it wouldn't have mattered.

No test by fire needed.

(NB this is English common law. I've been told in the past
([https://news.ycombinator.com/item?id=5402595](https://news.ycombinator.com/item?id=5402595))
that the UCC in the US is a whole lot more subjective than English law, so
this is likely wrong in the US).

~~~
scotty79
Do you have in UK these scammers that invite bunch of old people to some sort
of meeting where they give them cake, some crappy gift and convince them that
some other crappy thing, like a wool blanket is worth few thousands dollars
and they sign agreements with them so they can pay for the said blanket in
installments?

The rule you described is really nice but is it used in practice to fight such
scammy business practices?

~~~
thepicard
Your example is ridiculously contrived.

I would imagine the rule is not used extensively in practice because it exists
as a preventive measure should such a thing ever come up.

~~~
dfox
That is not an contrived example but pretty accurate description of actual
scam scheme that got popular again in recent years.

------
csense
How frequently is the little guy is screwed when they don't read the big
institution's fine print before they sign?

Finally, a big institution is screwed when they don't read the little guy's
fine print before they sign!

~~~
umsm
Ignorance is not bliss. You can't claim not to have knowledge of something and
not suffer the consequences...

~~~
NegativeK
The idea that everyone fully reads every EULA is completely unfeasible.

This means that ignorance isn't bliss, so much as a natural state in order to
function. To me, that implies something is wrong.

~~~
TazeTSchnitzel
If people read some EULAs they'd notice how concise and easy to read they are
these days.

------
bradleyjg
This is why many professionally drafted contracts will have somewhere in the
integration clause[1] language that says that the agreement can only be
modified in writing, and only by a person with a specific title at the
company.

[1] [http://www.legalmatch.com/law-library/article/contract-
integ...](http://www.legalmatch.com/law-library/article/contract-integration-
clause.html)

~~~
Spoom
I'm not sure that such a clause would work here. The example legal clause in
your link:

"This Contract contains the entire agreement of the parties with respect to
the subject matter of the Contract. The contract supersedes any prior
agreements, understandings, or negotiations, whether written or oral. This
Contract can only be amended through a written document formally executed by
all parties."

While that clause could apply _once the agreement is signed_ to any future
changes, before that, isn't it just negotiation between the parties? (Whether
it can be considered "good faith" or not is another matter, of course.)

~~~
jussij
I'm no lawyer but doesn't this line provide the required protection:

> This Contract can only be amended through a written document formally
> executed by all parties.

To me, that suggests the contract can only be amended if all parties provided
a written document approving the amendments.

In this case, only one party provided the required documentation.

~~~
bdonlan
IANAL - but it seems to me that in the link's scenario, you're not amending
that contract. You're ignoring or rejecting the initial proposed contract
(including this amendment clause) and instead proposing another (different)
contract. Since you never agreed to that original amendment clause in the
original contract, how would it have any force in the first place? Naturally,
if you were to attempt to modify the contract _after_ both parties signed, you
would need such a written document executed by all parties.

------
dctoedt
This is why I often include a "redlining representation" in contracts I draft
or review/edit. [1] Of course, that only works if you check to be sure the
redlining representation is still in the copy of the contract you're actually
being asked to sign.

[1] Clause: [http://www.oncontracts.com/general-
provisions/#sec-35](http://www.oncontracts.com/general-provisions/#sec-35).
Explanation: [http://www.oncontracts.com/surreptitious-contract-
changes/](http://www.oncontracts.com/surreptitious-contract-changes/) and
[http://www.oncontracts.com/surreptitious-contract-changes-
ii...](http://www.oncontracts.com/surreptitious-contract-changes-ii/)

------
D9u
I LoL'd so much at this... I love it! That his bank failed to read the fine
print, as so many of us do, yet signed the agreement anyway, is a hilarious
case of _poetic justice._

This reminds me of the story here awhile back regarding someone signing credit
card receipts with increasingly absurd signatures, including a drawn picture
in lieu of his legal signature.

[http://consumerist.com/2009/02/03/dont-draw-genitalia-as-
you...](http://consumerist.com/2009/02/03/dont-draw-genitalia-as-your-
signature-when-paying-via-credit-card/)

------
ds9
I did something similar (USA here).

I asked for an automatic debit for a student loan, and got a form to fill out.
Among other terms it specified that the lender could change the amount taken
from my account, unilaterally!!!

So I crossed out this part, specified literally the current amount in dollars
and cents, and said that any change would require separate written consent
from me.

And sent it back with a signature. As others pointed out above, if they failed
to notice the change, it is their own fault and their own problem, just as
they would argue that it was my fault and my problem if I signed without
reading all their self-serving, tiny-font, lawyer-crafted language.

And they started debiting the account - which has no legal justification other
than that piece of paper, therefore they have agreed to the terms. It has not
come to a court case, but if they ever withdraw more than the specified amount
I'll sue.

Would I win? Maybe not, but if not it wouldn't be because of any flaw in my
approach. Rather it would be because of the defacto two-tier legal system,
where corporations have rights in proportion to their wealth and individuals
can't afford to enforce any theoretical rights they supposedly have. I wish I
could find the well-written rant on this topic (historical separate court
systems for aristocrats and peasants) - Falkvinge maybe.

------
peter303
It would a fraudelant contract in the US. When you alter the text of contract
in the US you must clearly highligh the alteration in the riginal text or as
an admendment.

~~~
comrade_ogilvy
And the contract change is not considered valid unless it was overtly accepted
by an employee with appropriate authority. A random low wage employee
processing these kinds of forms would be presumed to not have that authority
with the business.

~~~
scotty79
So you are saying that bank actually doesn't agree to anything when it signs a
contract with you if it doesn't delegate for that properly esteemed clerk?

~~~
varjag
No, it's OK as long as money's flowing the right way.

------
Havoc
Regardless of David vs Goliath sentiment, realistically one can't allow such a
thing in a modern society.

e.g. I sent 3 documents out today requesting signatures from directors -
signatures which by local laws bind the company they represent +- irrevocably.
If you allow the scenario presented then clause #138 could easily have read
"pay Mr Havoc a million a day".

~~~
kintamanimatt
It's pretty much up to you to check what you're signing. Inconvenience isn't a
get out of jail free card! Apply some technology to it or at the very least,
get some of those acetate sheets for use with the old school overhead
projectors, print your official contract onto that and use it as a poor man's
diff!

------
flog
I've been wondering about this for years. I hate sales people telling me they
can't negotiate as the contracts are standard... of course they can.

------
mathattack
Somehow I just can't see this working out well for him, but if it does, it
says something about the rule of law in Russia.

~~~
betterunix
I would be surprised if it did not work out well in the USA, to be perfectly
honest. There is nothing illegal in the extra terms he added to the contract,
and the bank is not in any position to claim that it failed to read the
contract. More likely, however, is that the news of this case has led every
bank on the planet to institute a "check all paperwork" policy to prevent this
from happening.

~~~
castis
because what the world needs, is a slower banking process.

~~~
olalonde
Perhaps it will give an incentive for banks to write shorter contracts. Also,
it could probably be automated with OCR software.

~~~
krasin
I would rather say: no paper contracts and use digital cryptographic
signatures everywhere.

------
X4
I should feel embarrassed that somebody alters contracts on his behalf, but
this time I really feel happy for this guy. He exploited a Bank by playing out
his own rules on them.

Just today I was thinking about Google and other big companies founded by
Russians and then I see this little man hacking himself into success. I feel
deep respect for persons who start from nothing, but with big success! Despite
the prejudices people may have with Russian, some of them are really damn
smart and this man proves it..

Thats quite an achievement, hats off to you sir.

------
Pitarou
I've no idea about Russia, but this WOULD NOT WORK in the Anglo-Saxon legal
system.

Legally, the signed contract is simply the physical manifestation of something
deeper: the _consensus ad idem_ or _both sides agreeing to the same thing_.
Tricking a busy clerk into signing an altered document does not constitute
acceptance of the contract.

The court generally chooses not to reward such dishonesty, and therefore
allows the honest party to choose which version of the contract should hold.

------
Demiurge
Brilliant, I'm so itching to try this in US.

~~~
mhb
How would that work? I don't remember ever getting back a copy of a credit
card agreement after I sent one back. I'm not even sure I've sent something
back. Isn't that all on line now?

~~~
fsckin
Just add the following: "Granting the account is considered acceptance of the
terms."

~~~
scotty79
I don't think it would have as much strength as having actually signed
document in hand.

------
tghw
This is a good reminder, especially to contractors and freelancers, that when
you receive a contract, it's just the beginning of a negotiation, not a sign-
and-send situation.

------
SurfScore
This man's got spunk! Get him to Silicon Valley with some venture capital and
he'll make waves.

------
nickkyit
Further developments in the story: [http://www.minyanville.com/business-
news/editors-pick/articl...](http://www.minyanville.com/business-news/editors-
pick/articles/Russian-Bank-credit-card-fine-print/8/8/2013/id/51217)

------
nickkyit
Updated the story with the pic of the guy:
[http://www.minyanville.com/business-news/editors-
pick/articl...](http://www.minyanville.com/business-news/editors-
pick/articles/A-Russian-Bank-Is-Sued-for/8/7/2013/id/51205)

------
Fuxy
Haha now that's funny. The man did nothing wrong that's how negotiations are
done between lawyers all the time. He presented new terms, the bank agreed so
now they have to honor the contract they agreed to.

------
joe_the_user
I only know a small amount about the current Russian regime but I would assume
that this man isn't just anyone but someone with connections to the state and
the mafya.

------
Sarien
This story shows exactly what is wrong with EULAs.

------
yashg
The court did hold the agreement valid when the bank sued him, so the bank
will have to pay up as per the terms of the contract.

------
zenith2037
In my eyes, that man won and outplayed the system.

------
primelens
> In Soviet Russia ...

Eh?

~~~
jcl
[http://en.wikipedia.org/wiki/Yakov_Smirnoff#Russian_reversal](http://en.wikipedia.org/wiki/Yakov_Smirnoff#Russian_reversal)

------
bengrunfeld
Firstly, he is a legend. Having the guts to pull off a move like that is
admirable and unique.

I think it's a shame that regardless of if he wins or loses, many people
believe that "fine print" is a tool that only big institutions like banks or
insurance companies are allowed to use in their favor.

------
RDeckard
The girl in the picture looks like a leaner Kate Upton.

