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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 46184
Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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Hi there My situation. I paid deposit of £16800.00 for some

Resolved Question:

Hi there
My situation.
I paid deposit of £16800.00 for some machinery through an agent.the price if the machine was £168000.00 The agent was already committed contractually to buy the machinery prior to my envolvement. I was not able to Colette the purchase as my customer had cancelled his requirement. I did not purchase the machine as it would have been financially ruinous. The agent agreed to return my deposit if the real fell through through no fault of my own. He is now saying that he gas no obligation to return my deposit. Is this true?
Submitted: 3 years ago.
Category: Law
Expert:  Ben Jones replied 3 years ago.

Ben Jones :

Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today.

Ben Jones :

You say the agent agreed to refund the deposit if the deal fell through no fault of your own - when was this agreed? Was it documented anywhere?

Customer: It was agreed prior to sending the deposit. There is no legal paper work in the form of a contract us. He does however have a contract with the finance company. My deposit is mentioned on his invoice to them prior to the deal falling through.
Customer: He mentioned iron an email to me. I have the email. He says that he has no legal obligation to return anything and that he is only doing so as a good will gesture minus his expenses. Ian concerned his expenses will amount to the value of my deposit.
Ben Jones :

Do you know what losses he may have suffered as a result of this cancellation?

Customer: Re typed. 9:10 PMIt was agreed prior to sending the deposit. There is no legal paper work in the form of a contract between us. He does however have a contract with the finance company. My deposit is mentioned on his invoice to them prior to the deal falling through.9:12 PMHe mentioned the deposit refund in an email to me. I have the email. He says that he has no legal obligation to return anything and that he is only doing so as a good will gesture minus his expenses. I am concerned his expenses will amount to the value of my deposit. I have written to him with the expectation of him retaining £1000.00 for his inconvenience.
Customer: He would have suffered the inconvenience of his fight. By the way his customer still continues to use the machinery to meet their production requirements. The machinery vendor is in Frankfurt Germany.
Customer: Oh and the cost to re market the machinery on the web. £300?
Customer: Prior to my involvement he was struggling to sell the machine. I am able to obtain an affidavit regarding his commitment to take the machine from a third party prior to my involvement the machines were being advertised in his web site prior to our involvement. That is how we got to know about the machine.
Ben Jones :

ok let me get my response ready please

Ben Jones :

Generally, when a person places an order for something and pays a deposit they enter into a legally enforceable contract with the seller. It is implied that the seller has accepted the deposit as security and as proof that the buyer wants to proceed with the contract.


 


Unless the seller subsequently commits a serious breach of contract, or there was a cancellation clause, the buyer would have no legal right to cancel the agreement and if they do so they will be acting in breach of contract and risk losing their deposit. This is especially true if the deposit was described as non-refundable.


 


However, when deciding to keep a deposit a part must ensure that they only do so to cover any losses or costs associated with the cancellation, not ti just keep the money for their own profit. If that happens then it could amount to being a penalty clause which is legally unenforceable.


 


So if the other party has suffered genuine losses or expenses as a result of the cancellation they can use the deposit to cover these but they must be actual losses, it will not cover stress and inconvenience, we are looking at quantifiable costs.


 


If you are having difficulties recovering the remainder of the deposit then it is recommended that the process follows these steps:


 



  1. Reminder letter – if no reminders have been sent yet, one should be sent first to allow the debtor to voluntarily pay what is due.

  2. Letter before action – if informal reminders have been sent but these have been ignored, the debtor must be sent a formal letter asking them to repay the debt, or at least make arrangements for its repayment, within a specified period of time. A reasonable period to demand a response by would be 10 days. They should be advised that if they fail to do contact you in order to resolve this matter, formal legal proceedings will be commenced to recover the debt. This letter serves as a ‘final warning’ and gives the other side the opportunity to resolve this matter without the need for legal action.

  3. If they fail to pay or at least make contact to try and resolve this, formal legal proceedings can be initiated. A claim can be commenced online by going to www.moneyclaim.gov.uk. Once the claim form is completed it will be sent to the debtor and they will have a limited time to defend it. If they are aware legal proceedings have commenced it could also prompt them to reconsider their position and perhaps force them to contact you to try and resolve this.


 


Whatever correspondence is sent, it is always advisable to keep copies and use recorded delivery so that there is proof of delivery and a paper trail. The court may need to refer to these if it gets that far.


 

Customer: Ok.
Customer: Ok
Customer: Sorry didn't realise ok was being posted. What time frame do you think is acceptable to give him if he has already had 3 months?
Ben Jones :

has he been sent the formal reminders and a threat of legal action?

Customer: Yes. He has responded saying that he will return what ever deposit is left after expenses once he has sold the machine.
Ben Jones :

when do you think the machine may be sold?

Customer: I don't know. It could be several months.
Customer: Is he legally right in his assumption of not having to return my deposit.
Ben Jones :

the issue is that he can try and use the deposit to cover some of these expenses so until the machine has sold he would not know how much they are. So you could still try and pursue for part of it now, with the remainder paid once the sale has gone through and he knows the expenses incurred. In any event, you have 6 years t make a claim so you will not be running out of time in that respect if you had to wait a few months

Customer: Ok. How would I go for an initial partial claim.
Ben Jones :

you need to try and negotiate on a sum that is mutually acceptable to you both - if no agreement is reached then the court option is again you have to consider using

Customer: Ok. Thanks for your help. I think I will formerly write to him giving 1 month followed by a request for part payment of £10000.00 does that seem fair to you?
Ben Jones :

Yes, although I am not going to be very familiar with the costs he may incur so as you would be in a better position to determine these, use them in your calculations

Customer: Ok. Thank you very much.
Ben Jones :

You are most welcome. Please take a second to leave a positive rating for the advice I have provided as that is an important part of our process. Thank you and feel free to bookmark my profile for future help:



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