AT&T Credit Corp. v. Transglobal Telecom Alliance

In August 1994, AT&T Credit Corp (AT&T Credit) (plaintiff) agreed to lease telephone equipment to Transglobal Telecom Alliance (Transglobal) (defendant) for a period of 48 months. As a part of the transaction, AT&T Credit purchased the equipment that Transglobal selected from AT&T Corp. and then leased the equipment to Transglobal. The lease agreement, warranties, and other relevant agreements and paperwork were distributed and approved by all three parties in July and August 1994. In the lease agreement, Transglobal waived all rights to make any kind of defense against legal actions by AT&T Credit arising from Transglobal’s failure to make payments. Transglobal made a lease payment in November 1994 but made no other payments. The lease agreement said that AT&T Credit could recover liquidated damages for missed payments, with interest, plus all the remaining monthly payments discounted by 5 percent, plus the present casualty value of the equipment with a 5 percent discount. AT&T Credit sued to recover damages in accordance with the agreement and for possession of the leased equipment. Transglobal countered and argued that AT&T Corp. had breached the contract by failing to provide additional services that it had promised. AT&T Credit moved for summary judgment, but Transglobal opposed the motion, arguing that the lease agreement with AT&T Credit was part of a larger business arrangement with AT&T Credit and AT&T Corp., meaning that Transglobal’s waiver in the lease did not apply.