How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask tdlawyer Your Own Question
tdlawyer
tdlawyer, Lawyer
Category: Law
Satisfied Customers: 1096
Experience:  11 years experience of general practice.
73598664
Type Your Law Question Here...
tdlawyer is online now

Re: contract law or franchise agreement law As a franchisor,

Resolved Question:

Re: contract law or franchise agreement law

As a franchisor, I was paid £6,000 as a deposit on our franchise package, back in December 2013.

I went back and forth with the potential franchisee, to agree the terms of our franchise contract, which were agreed via email and pdf docs. The contract was NOT signed, but the franchisee agreed (via email) to make payment of balance of franchise fee (£14k) in January 2014 - which has not been paid.

They are now demanding the return of the deposit of £6k.

On what legal grounds can I keep the deposit? Or at least deduct (substantial) expenses and costs?
Submitted: 3 years ago.
Category: Law
Expert:  tdlawyer replied 3 years ago.

tdlawyer :

Hi thanks for your question. My name isXXXXX can answer this for you.

tdlawyer :

You can keep the deposit once you have a legally binding agreement in place. You don't necessary need to sign a written contract to have a binding agreement.

tdlawyer :

If you have agreement in emails that you have an agreement, then it doesn't necessarily need to be signed at all. This would be as good as having a signed agreement.

tdlawyer :

It has to be clear though that you both intended to enter into the agreement on the terms of the agreed document.

Customer:

So they paid a deposit of £6k, with a commitment (by email) to pay the balance of £14k in Jan. Is that considered legally binding?

tdlawyer :

Well, it sounds like it to me.

tdlawyer :

It's sensible to have the email trail reviewed by a solicitor if you're thinking of suing for the £14k balance, but otherwise, it'll be a small claims matter if he sued to recover the £6k. Hence, the point is that the loser does not pay legal costs, so no point in incurring legal costs for small claims if you can avoid it as they're effectively wasted costs because you can't recover them.

Customer:

I'm unlikely to pursue the 14k. But I don't want to return any of the 6k.

Customer:

Are there specific points of contract law that I can quote?

Customer:

Currently, they have appointed solicitors to attempt to get a refund

tdlawyer :

Nothing specific, no. It's simply a case of there being an agreement, which you have to interpret from the emails themselves.

tdlawyer :

Does this answer your question for you?

Customer:

Final point - do I need to have disclosed (in advance) that the deposit is NOT refundable? Or is it a simple matter that he 'reneged' on the agreement, by not paying the balance, hence deposit is forfeited, etc?

tdlawyer :

If you agree it's not refundable, then brilliant, that makes it clear. But where you don't say, then there assumption is that it's not refundable, because you haven't agreed that it will be reunded.

Customer:

OK, that answers the questions. Very helpful, thanks. Bye.

tdlawyer :

Thank you! Have a good weekend.

tdlawyer and other Law Specialists are ready to help you