Legal Question in Business Law in Ohio

Re: cust c ancels an order, he signs a proposal & pays dep. goes w/ another co.

I think the answer to your question lies in what the signed contract says. Does it state the deposit is non-refundable? If so, then you may be entitled to keep all of the deposit.

Is the contract amount based on the amount of time you would have put in (e.g. $500 for approximately 10 hours of work on the order)? If so, you may be able to keep the amount that relates to the work you have put in so far, especially if the work you did for the customer is unique to him and cannot be used for another customer in the future.

It will depend on the contract you have and how far in the process the customer canceled, but the customer's canceling the order may be a breach of the contract. It is probably in your best interest to keep him and you under that contract so you can get damages - money for the work you have put in to his order. You should speak with an attorney before you take further action here.

If you have any further questions, feel free to contact me.