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networkn

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#79950 24-Mar-2011 15:33
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Hi There!

We are a reseller who has looked after a client for 2 years. We have done a good job by their own admission. We quoted for replacing their system for about 13K. They asked us to be more competitive and we tighented up the quote. They issued a purchase order for the gear. 3 days later after we had already ordered the gear, opened it and configured it, they asked to put the whole deal on hold pending another quote coming in through one of the external directors. I warned them that not completing the sale would incur a part of the labour charges and a restocking fee of 5% on opened or not returnable hardware/software plus bulk freight costs.

They have decided to move to this other provider and are refusing to pay us any costs.

Do I have a legal position I can take through small claims?

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SteveON
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  #451495 24-Mar-2011 15:39

If the 5% was noted on the order or in your terms of service, then yeah go ahead. And don't forget to add in a bill for your time.

There is always Baycorp and people hate having a bad credit rating esp businesses.

johnr
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  #451500 24-Mar-2011 15:47
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I would say Ball is in your court as you have the purchase order from the company

 
 
 
 


freitasm
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  #451510 24-Mar-2011 16:13
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If the PO is a binding document, go for it...





 

 

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networkn

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  #451538 24-Mar-2011 17:39
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Unfortunately there is nothing in my standard terms and conditions about a restocking fee, but I would consider it pretty much implied. In 15 years I have never seen anything like this, and I can't believe they would behave this way let alone dispute a restocking fee.

robbyp
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  #451541 24-Mar-2011 17:48

If you don't note a restocking fee, I would think you wouldn't be able to charge on. However if they signed a contract, they could have to stick to that contract and pay the full price. It would however depend on your contract.

sleemanj
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  #451551 24-Mar-2011 18:33
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Interesting dillema.

IANAL, but, I'd be of the mind that the PO is binding, and that they should be forced to go through with the purchase.

My reasoning, is, house sale and purchase agreements are effectively a purchase order, right, and we all know that you can't just "walk away" from one of those (your reason for walking away needs to be part of the agreement).

 I would suggest that taking them to the disputes tribunal over any out-of-pocket expense you have after returning everything you can is the best course of action, I imagine, there'd be a good chance of success.

 




---
James Sleeman
I sell lots of stuff for electronic enthusiasts...


maverick
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  #451555 24-Mar-2011 18:42
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Really we are only guessing here as we don't know what is contained in the PO, your best bet is to seek legal advice




Yes I am a employee of WxC (My Profile) ... but I do have my own opinions as well Wink

             

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Handle9
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  #451557 24-Mar-2011 18:54
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Depends on your T&Cs. IANAL but if they make the PO a binding contract then you are within your rights to fulfil the contract and demand payment. If they want to cancel without consideration then you can sue them for damages.

This is why companies (including the one I work for) have draconian T&Cs that threaten death and destruction on failure to pay/complete contractual obligations.

On first glance if you have incured costs that are more significant than those involved in the disputes tribunal, and I had the time, then I'd be having a go.

If I had to go to the disputes tribunal I wouldn't just be going for a restocking fee if you can't return the hardware/software, I'd be going for the full cost. I'd also be seeking my margin on the entire job as part of the damages. If you have a contract that doesn't allow them to cancel (especially given that this is business to business) then they need to complete the contract.

ascroft
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  #451583 24-Mar-2011 20:26
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I am going to propose another approach.

Can you just swallow and move on. Sounds like you are in the right but do you want to spend the time chasing this down, and engaging lawyers. The customer bad mouthing you potentially.

I would write them a letter expressing your concern and disappointment when you had their PO and see of you can get something from them.

I wouldn't let this eat you up and just move on and do you day job instead of sorting this out.

My 5c.




Mark Ascroft
Wellington


gzt

gzt
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  #451622 24-Mar-2011 23:03
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Don't know about the legal position. Relationship questions aside, if you have not sent an invoice yet, there is nothing to stop you invoicing them. After thinking about it, who knows, they may decide to pay.

If not, then later again, after getting a warning notice from you, they may decide to pay. If not, then is the time to decide. It is possible during the process they may consult legal advice, and that advice will be to pay.

IMHO it is a bit difficult to invoice for a restocking fee if that is not in your T&C, but the labour seems justified.

+1 to the approach proposed above (ascroft) as well : ).

robbyp
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  #451637 24-Mar-2011 23:30

ascroft: I am going to propose another approach.

Can you just swallow and move on. Sounds like you are in the right but do you want to spend the time chasing this down, and engaging lawyers. The customer bad mouthing you potentially.

I would write them a letter expressing your concern and disappointment when you had their PO and see of you can get something from them.

I wouldn't let this eat you up and just move on and do you day job instead of sorting this out.

My 5c.


The relativly small amount being claimed would be for the disputes tribunal, which is an easy process, and doesn't involve lawyers. If nothing else, it is a learning experience and worth doing. I think it is reasonable that the OP isn't left out of pocket.

Ragnor
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  #451653 25-Mar-2011 02:10
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It might worth trying to contact someone in the company a level or more above whoever you were dealing with for the order.  People get super defensive when they make mistakes trying to cover their ***, you can often get better results going above or around them.

Otherwise for 13k+ it's probably worth booking half and hour with a decent lawyer who's a specialist in the area so you have a better idea of whether your quote and their PO stand up as a contract.

Assuming it's a binding contract a formal legal letter along with the invoice will get their attention, otherwise you will have go with the legal options to recover your costs.

When it comes to getting paid I'm not a fan of the act like a doormat and get walked all over softly approach to non payment.





AndrewTD
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  #451770 25-Mar-2011 12:59
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Be firm.
Did you provide them a written quote that they then accepted by sending you a written PO?
(emails count as "written".)
Does your quote include explicitly, or by a link, your standard Terms and Conditions?

Follow to the letter your written and standard terms and conditions.
Invoice them ASAP.
Highlight to them, in writing, politely (not threateningly) any payment and/or penalty terms in your quote / terms and conditions.

Offer them an out, but not at your expense.
Something like: "Since you have now told us that you would rather not receive the goods and services you have ordered from us, we will now endeavour to return or resell the hardware components. We do however require payment in full from you first, but we will credit you the value of any monies we are subsequently able to retrieve on disposal of the hardware, less handling costs. Charges for services already performed are payable in full.
This offer is only valid if you do pay our invoices to you in full by the due dates."


Something like that.

Good luck :)




kind regards Andrew TD


networkn

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  #451771 25-Mar-2011 13:03
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I think the issue will come down to the fact I don't have specific terms and conditions listed, we just assume the default ones will cover us.

The issue I see, is that no restocking fee's are specifically mentioned, and that if I claim the entire payment it's too big to go through small claims and I don't want to go to court over it.

I probably need to look at doing something a little more enforceable with my T&C's but in 15 years I've never been in a situation like this before. It's incredibly disappointing.

savag3
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  #451796 25-Mar-2011 14:33
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Disputes Tribunal limit is $15k now or $20k if both parties agree.

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