The Third Circuit recently affirmed a summary judgment against plaintiffs in a class action, holding in an unpublished opinion that failing to exercise a contractual right does not constitute altering the contract’s terms.
Plaintiffs were credit-card holders who had purchased optional debt-insurance policies for their cards. The defendants—who issued and serviced the cards—helped cardholders get easier access to policy benefits by waiving some eligibility conditions of the debt-insurance agreements. Plaintiffs had not received notice of these new policies; they argued that the changes amounted to an unauthorized, material alteration in the debt-insurance agreement and that continued charges unjustly enriched the defendants.
But the Third Circuit explained that the defendants had not actually altered the agreements’ terms: they simply declined to exercise contractual rights for the cardholders’ benefit. Thus, the defendants had neither breached the contract nor charged any fees they weren’t entitled to. The court therefore affirmed summary judgment in favor of the defendants.