Legal Question in Business Law in California

Re: Payments not received

Let me see if I understand this correctly: you took a check for a deposit, but did not cash it. The check was for the full value of the goods. Then the customer paid, seperate from the check, around 60% of the value. Now they are defaulting on the remaining 40%, and you want to know if you can deposit the check and return the remaining 60%?

Was there a contract for the sale of these goods? If so what does the contract say for about default? Most likely depositing the full check into an account will be ineffective, but even if it does go through you are opening yourself to a world of litigation. Your customer would have a number of potential claims against you. My recommendation, depending on the amount, is to either take them to small claims court or hire an attorney to assist you in debt collection. I would not go attempting to cash the check, unless your contract specifically states that this is an acceptable action.

Re: Payments not received

My guess is that the check is no longer good. Either payment has been stopped, or it is NSF. However, while cashing the check may entail some risk, it is better to have the money you are fighting over than not have the money. You have a security interest in the check, you have possession, it is a negotiable instrument.

If the bank is local, you should take the check to the bank, cash it, and see if you can deposit back the excess into their account (or, alternatively, send them a check for the excess).

Re: Payments not received

I had the same thought as Mr. Gittler. Take the check to their bank and see if it is good. If it is, cash it, take your 40% in the form of cash or a cashiers' check, then redeposit the excess cash back into their account. Get a receipt for the deposit. If you know when their payday is, show up the day before.