Legal Question in Technology Law in California
Customer Cancels Purchase Order
Customers signs purchase order and gives required deposit, allowing us to build, deliver and install specialized Point of Sale computer equipment and computer based security surveillance system. Purchase order indicates that cancellation of this order within 24 hours will receive full refund of deposit, cancellations made after this grace period will forfeit entire deposit. Purchase order also states to allow minimum 10 days for delivery of goods. Customer cancels order 14 days later (one day prior to delivery) and requests full refund. Are we allowed to keep the entire deposit? We purchased all the equipment and custom built it to customers specs. Can we keep a portion of the deposit or must we return the entire deposit? Customer did not get equipment.
Thank you.
2 Answers from Attorneys
Re: Customer Cancels Purchase Order
No attorney can be sure about this without reading your P.O., but it sounds as though you are within your rights to keep the whole deposit. I would be glad to review your P.O. if you wish.
As a practical matter, the larger the deposit (and the higher percentage it is of the entire contract price), the more likely the "customer" will complain/threaten/sue. If there is a lawsuit, the court will look behind the contract to see whether the deposit is a reasonable approximation of the amount you actually lost because of the cancellation. There is language you can put in your purchase order to protect you in the event of such a lawsuit; it will also lessen the risk that such a lawsuit will be filed in the first place.
Best of luck!
Re: Customer Cancels Purchase Order
Depends on the exact wording of the P.O. It would also depend on the size of the deposit.
In reality, you may be able to sue for specific performance, and get all of your losses back.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
