Legal Question in Business Law in New York

advanced deposit

My parent corporation is asking me to keep a client's advanced deposit because the client can't pay the balance of the order. The payment terms are 30% advanced deposit / 70% before delivery. There is no signed agreement from the client agreeing to forfiet the deposit in the event they can't pay the balance. Does my company have a legal right to keep the deposit. I think we can be sued by the client for reimbursement of their deposit.


Asked on 4/09/09, 9:43 am

1 Answer from Attorneys
Walter LeVine Walter D. LeVine, Esq.

Re: advanced deposit

Since you do not have anything from the customer. expect a problem. While you cannot automatically keep the deposit, you are entitled to damages for any loss you may incur. You do not describe the products to be purchased/manufactured. It is possible your damages may equal or exceed the deposit, and it is also possible your anticipated profit, if the products can be resold or re-stocked, are less than the deposit, so any difference should be returned. More facts are needed for a better reply.

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Answered on 4/09/09, 11:46 am


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