Legal Question in Business Law in Iowa
I own a small business. I received a check for over $2,000 for goods and services. It was returned NSF. The customer seems unwilling to resolve the issue and is avoiding my phone calls. I have already paid sales tax and commissions on the sale. I don't just want to pick up the inventory. What options do I have?
2 Answers from Attorneys
I'd sue the person in small claims court. That can often get the person to the table.
While it won't be a large amount, you should have written agreements with your commission sales force that they don't *earn" a commission until the amount is collected from the customer. If you make an advance against commission, this should be viewed as a loan and you have a right to "charge back" the amount of paid, but unearned, commissions.
If the person wrote the check knew it was bad when it was issued, there may be criminal liability. In Georgia you can send a notice of dishonor to the check-writer to start this process. A failure to pay after notice may raise a presumption that a crime has occurred.I suspect there are similar statutes in Iowa, so check with a lawyer in your jurisdiction. This is often an effective way of applying pressure.
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