On March 25, 2026, in Thrive Operations, LLC v. Gecko Robotics, Inc., the Massachusetts Superior Court denied Thrive’s motion to dismiss Gecko’s counterclaims, including a claim under Massachusetts General Law Chapter 93A, Section 11, arising from a dispute over managed cybersecurity services and early termination fees (ETFs). From the standpoint of the party accused of violating Chapter 93A, the decision illustrates that a commercial contract dispute may survive a Rule 12(b)(6) challenge where the pleadings plausibly allege the use of contractual leverage in a manner that could be viewed as commercially unfair.
The parties’ relationship was governed by a Master Services Agreement (MSA) and related Service Orders. After providing notice of alleged performance deficiencies — including failure to respond adequately to audit requests, poor trouble-ticket response rates, and inadequate endpoint protection — Gecko purported to terminate the contracts for cause. Thrive rejected that characterization, treated the termination as either a non-renewal or a termination without cause, and asserted that Gecko owed substantial ETFs. Thrive then sued for breach of contract and related claims; Gecko counterclaimed, including for breach of the implied covenant and violation of Chapter 93A.
The court held that Gecko’s allegations, if proven, could support a finding that Thrive violated Chapter 93A. Importantly, Gecko tethered its Chapter 93A to the same conduct underlying its implied covenant claim: Thrive’s alleged refusal to recognize a for-cause termination and its threat to enforce liquidated damages provisions that, according to Gecko, it knew or should have known did not apply. The Service Orders imposed ETFs only if Gecko terminated “other than as permitted by and in accordance with” the MSA following Thrive’s breach. Because Gecko plausibly alleged that it had provided adequate notice of material breach and properly terminated for cause, the court could not conclude on the pleadings that Thrive was simply enforcing a valid contractual right.
Looking through a defense-oriented lens, the key takeaway is that enforcement of a contractual provision — standing alone — does not constitute a Chapter 93A violation. The court expressly acknowledged that enforcing a valid contract right cannot form the basis of a bad faith claim. The risk arises, however, where the pleadings plausibly suggest that the party invoking the contract has taken an “extreme and unwarranted view” of its rights or is using the threat of liquidated damages as leverage despite knowing that the contractual preconditions for such damages were not satisfied. In that circumstance, Massachusetts precedent permits a Chapter 93A claim to proceed, particularly where a complainant frames the alleged conduct as an attempt to pressure the counterparty into paying sums not actually owed.
The court also declined to strike Gecko’s affirmative defense that the ETFs constituted an unenforceable penalty. Although enforceability of a liquidated damages clause is ultimately a question of law, it is fact intensive and turns on whether, at the time of contracting, the agreed amount was a reasonable forecast of anticipated damages. Because that inquiry requires evidence about the parties’ expectations and the proportionality of the ETFs, the court held that the issue could not be resolved on the pleadings. This ruling reinforces that a Chapter 93A theory premised on wrongful invocation of a penalty clause may survive early dismissal where the validity of the clause itself remains an open factual question.
The decision does not establish liability under Chapter 93A. However, it demonstrates that, in a dispute between sophisticated commercial actors, a claim may proceed past the pleading stage where the defendant’s conduct is plausibly characterized not as mere contract enforcement but as the strategic use of disputed termination and liquidated damages provisions to extract payment. For defendants, the case highlights how termination positions and demands for liquidated damages that are firmly grounded in the contract’s express terms and supported by a defensible good-faith interpretation may be better positioned to withstand scrutiny, particularly where Chapter 93A exposure is in play.
