Legal Question in Business Law in California

This will all depend on the contract and the value of the goods sold or services sold.

If this is a sale of goods more than 500 dollars you should have something in writing. If it is a custom good there are exceptions... You need to look to your agreement. If not the California Commercial Commercial Code will give you a better idea.

Mr. Green is on the right track. Assuming you had a written contract with the customer, or even a written purchase order, its terms regarding refunds would apply. If there are none, we would look to the provisions of the Commercial Code to determine when title passes and when the buyer's right to inspect and reject terminated. There could also be a legal issue as to whether the transaction is primarily a sale of goods (the file server) which is covered by the Commercial Code, or primarily a contract for services, which is not. In any event, I'm inclined to think the facts and law would show that the sale is final, title has passed, and you are entitled to sue for and collect the balance due, The specific deal terms might, however, point the other way. Finally, there is always the question as to whether keeping the customer's favor warrants taking back this server and furnishing another that meets their needs. Don't blow a million-dollar relationship by being legally right on a ten thousand dollar deal.