hi guys thanks for all the replies and suggestions. a little update: the contract/agreement was sent to me via regular mail, i cut and pasted the part were they are saying that the 1st term(initial term) is a 3 year agreement, the 2nd term is 1 a year agreement, if you cancel before the second term then it's $350 after the 2nd term it is $250.
"2. TERM. This Merchant Agreement shall become effective upon the date that Merchant is assigned and issued a Merchant Account Number (the “Effective Date”). iPayment will advise Merchant in writing of such Merchant Account Number. The initial term (“Initial Term”) shall commence on the Effective Date and shall continue in force for three (3) calendar years after it becomes effective (the “Initial Term”) and shall thereafter automatically renew for additional one-year terms,
unless at least thirty (30) days prior to expiration of the then existing term a written notice of termination (to be effective at the expiration of the then existing term) is given either by Merchant to Bank and iPayment or by Bank or iPayment to Merchant, unless sooner terminated in accordance with the provisions of this Merchant Agreement.
Notwithstanding anything in this Merchant Agreement to the contrary, the parties hereby further agree and acknowledge that in addition to any other remedies contained in this Merchant Agreement or otherwise available under applicable law, if (a) Merchant breaches this Merchant Agreement by improperly terminating it prior to the expiration of the Initial Term; or (b) if this Merchant Agreement is terminated by Bank and iPayment prior to the expiration of the Initial Term due to any Event of Default by Merchant, then in either event, Bank and iPayment will suffer a substantial injury that is difficult or impossible to accurately estimate.
Accordingly, after giving due consideration to the costs that Bank and iPayment may incur by reason of such early termination, including without limitation those incurred in processing the Merchant Application and approving Merchant for the Services, and in an effort to liquidate in advance the sum that should represent such damages,
the parties have agreed that Merchant shall pay, as liquidated damages the sum of (i) $350.00 if terminated before completion of the first year of the Initial Term; or (ii) $250.00 if terminated after completion of the first year of the Initial Term but prior to the end of year two or three of the Initial Term, which the parties agree is a reasonable pre-estimate of the probable loss to Bank and iPayment in such event, and shall not be construed as a penalty. Merchant’s obligation with respect to the Monthly Minimum Discount Fee will end simultaneously with Bank’s receipt of the payment of the respective liquidated damage amount required pursuant to this Paragraph 2."