Legal Risks in Dial 7 Car & Limousine Service Terms: Key Contractual Pitfalls and Solutions | Erayaha

## When Car Service Terms Create Costly Legal Exposure: The Dial 7 Case Study

Imagine a single ambiguous clause costing your business $250,000 in litigation or a regulatory oversight triggering fines of up to $100,000 under state consumer laws. Our analysis of Dial 7 Car & Limousine Service’s Terms & Conditions reveals several such risks—each with the potential to escalate into significant financial and reputational damage if not addressed.

1. Overbroad Limitation of Liability: Unenforceable Exclusions Dial 7’s limitation of liability clause attempts to exclude all consequential, exemplary, special, indirect, incidental, or punitive damages, even in cases of gross negligence or intentional misconduct. New York law and public policy generally prohibit waivers for gross negligence or willful misconduct, making this clause vulnerable to being struck down in court. If challenged, the company could face uncapped damages, exposing it to claims well beyond the fare paid—potentially hundreds of thousands in a single incident.

Legal Analysis

critical Risk

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Added

DIAL 7 CAR & LIMOUSINE SERVICE, INC. SHALL HAVE NO LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT OR OTHERWISE FOR CONSEQUENTIAL, EXEMPLARY, SPECIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OFEXCEPT WHERE SUCH DAMAGES. THIS LIMITATION APPLIES TO ALL CAUSES OF ACTION OR CLAIMS IN RESULT FROM THE AGGREGATE, INCLUDING WITHOUT LIMITATION BREACH OF CONTRACT, BREACH OF WARRANTY, INDEMNITY,COMPANY’S GROSS NEGLIGENCE, STRICT OR WILLFUL MISCONDUCT. NOTHING IN THIS AGREEMENT SHALL LIMIT LIABILITY FOR PERSONAL INJURY, MISREPRESENTATIONPROPERTY DAMAGE, AND OTHER TORTS. ... THE FOREGOING LIMITATIONS OF LIABILITY APPLY WITHOUT REGARD TO ANY INTENTIONAL MISCONDUCT OR LOSSES CAUSED BY THE COMPANY’S GROSS NEGLIGENCE BY DIAL 7 CAR & LIMOUSINE SERVICEOR INTENTIONAL MISCONDUCT, INCTO THE EXTENT PROHIBITED BY APPLICABLE LAW.

Legal Explanation

The original clause attempts to exclude liability for gross negligence and intentional misconduct, which is unenforceable under New York law and public policy. The revision carves out these exceptions, ensuring the clause is enforceable and compliant.

2. Unilateral Amendment Without Notice: Consumer Protection Risk The Terms allow Dial 7 to change or supplement the Service Terms at any time without prior notice. This exposes the company to regulatory scrutiny under New York General Business Law § 349 and similar consumer protection statutes, which require clear notice and consent for material changes. Failure to comply could result in statutory damages of $50–$1,000 per violation, plus attorney’s fees and class action exposure.

Legal Analysis

high Risk

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Dial 7 Car & Limousine Service, Inc. reserves the right tomay change or supplement these Service Terms by providing at any time withoutleast 30 days’ prior written notice. Your continued access to users via email or prominent website notice. Continued use of the Service TermsServices after suchthe effective date of changes or supplements indicates yourconstitutes acceptance of the Terms as changed or supplemented. It is your responsibility to review these Service Terms regularlyMaterial changes require affirmative user consent where required by law.

Legal Explanation

The original clause allows unilateral changes without notice, which can violate consumer protection laws. The revision introduces clear notice and consent requirements, reducing regulatory risk and improving enforceability.

3. Ambiguous Credit Card Hold and Payment Terms: Dispute and Chargeback Exposure The policy of placing a 150% hold on credit cards, combined with vague language about release timing and customer obligations, creates ambiguity. This can lead to disputes, chargebacks, and regulatory complaints under the Fair Credit Billing Act (FCBA). Industry data shows that unresolved chargebacks can cost businesses $20,000–$100,000 annually in fees and lost revenue.

Legal Analysis

high Risk

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Upon reserving with a credit or debit card, a preliminary hold equivalent to 150not exceeding 120% of the quoted fare iswill be placed on the card to secure thecover anticipated total including tolls, gratuity, additional stops, and waiting timecharges. ThisThe hold iswill be released whenwithin 24 hours after final payment is processed approximately 3-5 business days after. Customers will receive written confirmation of the triphold and release timing.

Legal Explanation

The original clause is vague and excessive, risking disputes and chargebacks. The revision sets a reasonable cap, clear release timeframe, and written confirmation, aligning with industry standards and the Fair Credit Billing Act.

4. Disclaimer of Responsibility for Lost or Damaged Items: Unenforceable Limitation The blanket disclaimer of liability for lost or damaged items fails to distinguish between ordinary negligence and gross negligence or willful misconduct. New York law does not permit businesses to disclaim liability for their own negligence in all circumstances. This exposes Dial 7 to potential claims and litigation costs that could exceed $50,000 per incident.

Legal Analysis

medium Risk

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Dial 7 Car & Limousine Service and its Affiliates are not responsible for lost or damaged items left in the vehicles, except where such loss or damage results from the company’s negligence or willful misconduct. We make every effort to locate property that has been left in one of our vehicles. We retain foundFound items will be retained for 30 days.

Legal Explanation

The original clause attempts a blanket disclaimer, which is unenforceable for losses caused by negligence. The revision aligns with New York law by excluding only losses not caused by the company’s fault.

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Conclusion: Proactive Legal Risk Management is Essential Our examination shows that even established service providers can harbor costly contractual loopholes. Addressing these issues not only strengthens enforceability but also reduces the risk of regulatory fines, litigation, and reputational harm.

Are your contracts exposing your business to avoidable legal risk? How would a regulatory audit view your terms? What would a single lawsuit cost your bottom line?

This analysis is for educational purposes only and does not constitute legal advice. For actual legal guidance, consult with a licensed attorney. This assessment is based on publicly available information and professional legal analysis. See erayaha.ai’s terms of service for liability limitations.