Deposit Refunds on work carried out B2B

[sbellare]

I am a small business and have just started my own business, supplying ready-to-wear ladieswear, made in India, bespoke for clients in UK.
We have a client which placed an order. A swatch of the fabric to be used for the garments was sent to the client (which was approved), prior to the fabric being dyed to the client’s required colour. On the invoice we asked for a 40% deposit, as we do with all our clients. This is to cover our raw material costs and alleviate the issue of clients cancelling orders when production has commenced and raw materials have been bought. The client paid the deposit, and the purchase of fabric commenced. A couple of weeks later, we sent a swatch of the fabric after the colour had been added to the fabric, the complete job lot of fabric to be used for all the garments had been dyed at this stage. The client claimed the fabric was not the same, even though the very same fabric chosen was just dyed to the client’s required colour. I found out that the client had changed their mind and found another supplier, this is the reason that they did not want to continue the production. We found this out from another source; the client was very arrogant and did not want to divulge this information. We are now left with metres and metres of fabric which was specifically dyed for the client, and cannot be used again. The client wants a full refund for their deposit.

My question is; am I obliged to give them a full refund, even though we have bought and dyed the fabric? What am I obliged to refund, if anything. I have had many expenses on top of this such as courier costs, my time and effort, overseas calls, etc. I would have thought the whole point of a deposit is that it is non-refundable, to protect businesses like me from orders being cancelled midway through the manufacturing process?
Thanks for any help.

[peterjhale]

what were the terms and conditions of the deposit ?

Did your client sign anything saying it was non refundable ?

[lakedaemon]

Originally Posted by peterjhale

Did your client sign anything saying it was non refundable ?

Now don't take anything as gospel, I studied law a long time ago. In fact, any legal matter should be taken to a lawyer who will give specific advice to your situation.

As I see it, you have invoiced and agreed on a project and therefore it seems like a strong case to presume that there is a contract. What Peter says is right, if you have any signed documents then you should carefully read through them. Written contracts are easier to fight than verbal.

Take specific advice from a solicitor. Intitial consultations shouldn't be expensive. Not sure if the Green Form Scheme is still in effect. Anyone?

[bwglaw]

It will depend on the terms and conditions that were agreed. The Courts may well readily imply that the deposit is to cover any loss as a result of a customer cancelling the order and given that the order is bespoke the Courts will again imply that such goods cannot be returned and/or resold.

If you would like specific advice please do not hesitate to contact me direct at the email address below.


Jonathan

[lakedaemon]

Originally Posted by bwglaw

If you would like specific advice please do not hesitate to contact me direct at the email address below.
Jonathan

Hi Jonathan, what are the rules these days with regards to initial consultations with solicitors. It used to be that initial consultations for around half hour were free or for a nominal fee. However, this was before email. Legal access to the general public used to be quite an issue, has this changed?

[bwglaw]

Originally Posted by lakedaemon

Hi Jonathan, what are the rules these days with regards to initial consultations with solicitors. It used to be that initial consultations for around half hour were free or for a nominal fee. However, this was before email. Legal access to the general public used to be quite an issue, has this changed?

Every law firm will differ. Your high street solicitor is likely to charge a fixed fee for advising on commercial and employment law. From experience, not many offer free initial advice for commercial/employment, except where an individual may need advice on an employment matter.

Our firm is not regulated by The Law Society hence offering clients half an hour free initial consultation and more the reason why we do not charge as much as the high street solicitor. We provide free initial consultation mostly by email based on the summary clients provide us - our advice is then likely to be more accurate than advice over the phone.