Our company is doing custom furniture. One of our clients ordered a custom table. We sent him the invoice with the terms and conditions.In there, there is a cancellation section stating that "Orders are not subject to cancellation. If cancellation is requested and accepted by us with their written acknowledgment, the Buyer will be charged a 25% cancellation fee"
The client approved the invoice and send us the 50% deposit. Then we start working and provide the client with drawings and samples for approval as he says it was urgent. Since then, the client changes his mind already 3 times about the specifications. Now he wants to cancel the order after 2 months of back and forth. He made his own calculation of how much time we spent on the drawing and said that as the production did not start, we can keep a very small amount and reimburse him most of the deposit. He had at the end that he hopes we can resolve this gently.
It seems obvious for me that we should charge the entire 25% cancellation fee especially considering all the time we spent. What is the legal view on this? What should we do?
2 Answers from Attorneys
I agree with you. You have a written cancelation policy that was assented to buy your customer. In the case of your business this to me seems most reasonable as we are talking about custom work. In fact, one might argue that depending on the amount of effort involved you may even have a claim to be paid above and beyond the 25% deposit under a legal concept of quantum meruit, which basically means you get paid for the services you provided.
Depending on the amount here, you may want to consult a lawyer in private for a proper analysis. But if this is ultimately a small claims matter, you can simply tell your customer that you are keeping his 25% as per your agreement and let him sue you if he wants.
If you would like to discuss further over a free phone consult, feel free to contact me anytime that is convenient.
DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.
You should hire me to be your company lawyer, and I will fight this fight for you.
The customer is just wrong.
Robert Davies, Esq.
201 820 3460
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