SWIPE ACADEMY - CONFIDENTIAL AGENT RESOURCE
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LIQUIDATED DAMAGES MATH SHEET
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Understanding the most predatory contract clause in the industry.

THE SCENARIO:
A merchant signs a 3-year (36 month) contract with a Liquidated Damages clause.
They want to cancel in Month 12 to switch to you. They have 24 months remaining.

THE MATH:
The processor calculates the average monthly profit they made off the merchant over the last 12 months.
Let's say the processor was making $400/month in net margin.
Formula: Average Monthly Margin ($400) x Remaining Months (24) = Liquidated Damages Penalty.

THE PENALTY: $9,600.

HOW TO RESCUE THEM:
You cannot buy out a $9,600 contract. You must advise the merchant to seek legal counsel to dispute the enforceability of the contract, OR wait until the renewal window (usually a 30-day window at the end of the term) to send a certified cancellation letter.