To the companies that have a contractual penalty for TOS violations: Do you actually collect the money ? I mean on the one hand I think I would make a lot of money that way because my contractual penalty for copyright violations is around 7k PER INCIDENT. That means I can sue the hell out of each offender (and yes, it is legal and valid in my country). On the other hand these people would probably want to kill me and they might try to hack my servers etc....

Would you collect it ?

I think that its a bad idea unless the circumstances are necessary. I am a firm believer in giving someone the benefit of the doubt until I have reason to believe they deserve otherwise.

So far I did never collect anything. I think I would collect it if someone sued me so I could cover my costs. However, I want to know if other hosting companies actually collect contractual penalties...

It depends - normally if I try to collect the funds a customer will sudenly dissapear and I have to use a debt collection agency. I only collect funds if absolutely neccessary - e.g. spam.

Originally posted by thomas.smith
I mean on the one hand I think I would make a lot of money that way because my contractual penalty for copyright violations is around 7k PER INCIDENT. That means I can sue the hell out of each offender (and yes, it is legal and valid in my country).

What country are you in? In the US, the other side's lawyer(s) would easily make the argument that your penalty is unenforceable. Even calling it a penalty would make your case weaker.

The problem is that you can specify liquidated damages in a contract, basically a way of recovering an expense that you may incur because of the actions of the other party. But you cannot specify punitive damages, which is what a penalty is. Only the government can make punitive judgments.

I'm sure other countries may be different, though, which is why I'm curious.

Kevin

Germany and it is usual here. Every company has the same contractual penalty which is 5.050,00 Euro for each breach. 1 and 1 Germany has it, for example. However, 1and1 USA doesn`t...

Originally posted by thomas.smith
Germany and it is usual here. Every company has the same contractual penalty which is 5.050,00 Euro for each breach. 1 and 1 Germany has it, for example. However, 1and1 USA doesn`t... Ive had to turn to a debt collection agency before to get atleast a portion of the money. The few times it was worth it for me to go to court or the person made me mad enough to go that far I easily won as I always have signed contracts (note: not talking about people hosting over the internet) and 90% of the time they dont even show up.

I love the cases that are <$2500 because I can take them to small claims court and they cant bring an lawyer + I dont need one so its almost a slam dunk give him the money or else case.

With the collection agency I never get all my money but even if I just get 50% its well worth it becasue I know that they will try to get all 100% of what they can and the agency has the resources to do it.

Germany may be a touch different so you will want to confer with a lawyer before you even publish the contact.