Legal Question in Business Law in California

Re: Wholesale to retail legal issue

First, I believe you should verify whether the law of California or the law of Vermont will govern your transactions. In most cases, a wholesaler or manufacturer will impose its contract on retailers, and the contract will include jurisdiction and choice of law clauses setting it up for the seller's convenience.

If, however, you have been using purchase orders specifying that jurisdiction and law is to be CA, this could change matters in your favor.

OK, on to the basic question: I've done a quick check of California law on this subject, and it appears that in the wholesaler-retailer context there are no statutory provisions that would prevent a wholesaler from contractually setting up and enforcing a tough credit-balance refund policy. There are statutes of this sort, but all seem to be for the protection of consumers rather than merchants. For example:

Civil Code 1810.3(e) re consumer credit balances in connection with a retail installment account;

Civil Code 1723 re posting refund policy at cash registers, etc.; and

Civil Cide 1748.13 re credit balances on credit card accounts.

I can't advise you with respect to Vermont law, if that applies.

Finally, I should mention that the Commercial Code, which is fairly uniform from state to state, may have provisions that affect your transactions and thus could affect your right to a quick cash refund. Your rights would depend upon what your contract(s) with the wholesaler say and what your reasons were for returning the merchandise. You might want to start with section 2711 (Buyer's Remedies)of the Commercial Code and read on through section 2719 (Right to Modify Remedies by Contract)and see if any of that seems to apply.

Re: Wholesale to retail legal issue

As with the other advice already posted, you may have options. But the practical issues remain - is this a vendor you want to continue a relationship with; where can you bring suit (it would be small claims for $935). Anyhow, if you want to talk about the issue, you could contact me. I am licensed in California (where I previously practiced) and back here on the East coast (where I have moved my office to now). I wont charge you just to talk.