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JGM
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 10087
Experience:  30 years as a practising solicitor.
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Im a retailer. We have taken orders for bridal gowns and

Customer Question

I'm a retailer. We have taken orders for bridal gowns and bridesmaid dresses back in February. In March of this year we were advised that the company had decided to close down due to ill heath of the owner. We are still waiting for orders which are now overdue. For the first time in 27 years of being in business we were let down by this company a couple of weeks ago: advised on the Monday that we would not be receiving 2 bridesmaid dresses for a wedding on the Saturday of same week. We had to provide the customer with two bridesmaid dresses from stock, a different colour to that ordered. We provided these dresses free of charge and also the alterations free of charge. Cost us a total of £440. I have withheld two invoices from the company as I am looking for them to compensate me. I have been advised that 6 dresses have arrived for me and I'm still waiting on 11. I have withheld payment of two invoices as I feel that I should be compensated for having to compensate the customer. The supplier is no longer working on a 30 day credit situation and all goods have to be paid for up front. I have today been advised by the supplier that even if I paid for the goods up front they would not be released until the two outstanding invoices have been paid. I have explained that I will be happy to pay them less compensation for all the trouble they have caused and once I have received the 11 dresses I am waiting for. Where do I stand?
Submitted: 3 years ago.
Category: Scots Law
Expert:  JGM replied 3 years ago.
Thank you for your question.

Can you clarify that the "company" and "supplier" are one and the same as you refer to them in your narrative?

Secondly what is the relationship between your business and the company from which you purchase your products?

In particular do you have a singular contract for all goods or a series of contracts "per order"?

This is very important as you will appreciate when assessing the answer to your question.

I hope this helps. Please leave a positive response so that I am credited for my time.
Customer: replied 3 years ago.

The company/supplier are Forever Yours. They have a UK office in Leeds. They are based in America and they have goods manufactured in China.


 


With regard to our relationship: we are a stockist. We stock around 40 of their dresses. If a bride decides she wants to order one of their gowns we take a 50% deposit, and quote around 5 months delivery. The balance being paid on arrival. We then place the order with the Leeds office and from their presumably they order with the factory in China.


 


I withheld payment of four invoices when I saw that things were going wrong. I am not an unreasonable person. Despite being let down by them 4 days prior to my customer's wedding, and having lost £440 and a considerable amount of time, I paid two invoices today in view of the fact that 6 dresses are now ready for despatch.


 


They will not release the goods ready for despatch until the remaining two invoices are paid. They have stopped all of their customers having 30 days credit and all goods must be paid in full before they will ship.


 


Since emailing you originally they have offered me 20% off the goods which are ready to be shipped. This totals £124.38. But I have told them I will not be held to ransom by being expected to pay these other invoices particularly when I'm paying up front for the shipment to be released.


 


I have told them I'll pay one invoice when a further 5 dresses are ready to be shipped to me and the final invoice when the last 6 dresses are ready for shipment. I'm not even confident that we will receive all our outstanding orders and I think we may have to let more people down and that is why I want to hold the payment of the last two invoices.

Expert:  JGM replied 3 years ago.
I think you may have to deal with them on a "wedding by wedding" basis, and also ask them what contracts they can guarantee will be fulfilled.

In this type of situation you could try to agree an escrow situation, ie, the funds are held by a third party pending them supplying the goods.

Certainly I think you have to consider safeguarding funds in some way pending receiving the goods.

Are they actually, in the present sense, in breach of contract?
Customer: replied 3 years ago.

Yes I do believe they are in breach of contract. I placed an order for 2 bridesmaid dresses on behalf of a customer back in February. They advised that the ship date would be 9th May, that ship date would be arriving in Leeds from the Far East. I would therefore expect to receive the goods perhaps around 2 to 4 days later than that. On the 20th of May I was advised that the goods had still not arrived in the country. The goods had to be fitted and ready for the customer to uplift on Thursday 23rd May. We then had to advise the customer accordingly and put a Plan B in place which obviously the customer was not happy about.

Expert:  JGM replied 3 years ago.
I agree with you. You are responsible to your customers. If they place you in breach of contract with your customer then they are presumably in breach of the agreement you have with them.

The important bit of the contract between you and them is that time has to be of the essence. If they don't supply for the particular wedding then there is no point in them supplying at all.

Is there anything in the agreement you have with them that would detract from time being of the essence being an implied term of very contract you have with them?
Customer: replied 3 years ago.

I'm not sure. I'm obviously at home at the moment but I think I may have terms and conditions in the filing cabinet at the shop which I'll check out tomorrow. But I'm sure I have a confirmation order from them with the ship date of the 9th of May. That refers to the order they did not supply.


 


I will have to check further with regard to ship dates for all the outstanding orders I await.


 


What about the point they will not release any further paid for goods till outstanding invoices are paid. Can they legally do that?

Expert:  JGM replied 3 years ago.
Again that depends on the specific terms of trading which you should check.

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