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Customer Wants To Go To Court

 
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Old 01-31-2011, 11:21 AM   #1
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Customer Wants To Go To Court


I sold a construction job and received $4,000 down payment. after 2 months the homeowner tried canceling, (we never order job bc she was difficult to get a hold of.) long story short we used her downpayment for job ordering ect and now she is demanding we pay her or go to court. Now im not trying to keep her money in any way but i've order 5 other jobs surpassing my credit limit and obviously those customers down payment didn't cover the costs as well as financing jobs.

So if we went to court how would it pan out? I want to pay her back asap but she needs to be patient.

btw im a llc, she never answers her phone.

I don't mind paying her more as compensation but im not sure what to do.
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Old 01-31-2011, 11:26 AM   #2
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Re: Customer Wants To Go To Court


So you signed a contract and took $4k from this woman?

Then 2 months go by and you haven't started the job, let alone ordered the materials? Because she was difficult to get a hold of? What did you need her for? You had the deposit, and presumably any measurements, material selections, etc.

So, obviously this woman now wants to cancel and her money back.

But, you use her down payment for other jobs, and did the same to other customers, and you don't have the cash available to refund her?

How are you going to afford going to court if you have no money?

Are you joking about all of this?

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Old 01-31-2011, 11:30 AM   #3
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Re: Customer Wants To Go To Court


we didn't order beacuse the women never answered so for the 1st month it was calling and rolling by of course no response. than out of nowhere she wants to cancel. regardless i don't know how everyone operates but im not ordering anything until i re-measure as precaution.

yes this is a REAl story
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Old 01-31-2011, 11:30 AM   #4
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Re: Customer Wants To Go To Court


Quote:
Originally Posted by precisext87 View Post
we didn't order beacuse the women never answered so for the 1st month it was calling and rolling by of course no response. than out of nowhere she wants to cancel. regardless i don't know how everyone operates but im not ordering anything until i re-measure as precaution.

yes this is a REAl story
What the hell was the $4k deposit for?

For you to go out and measure again?
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Old 01-31-2011, 11:35 AM   #5
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Re: Customer Wants To Go To Court


4k was a downpayment for a remodeling job. pretty big. though what usually happens in these situations?
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Old 01-31-2011, 11:37 AM   #6
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Re: Customer Wants To Go To Court


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Originally Posted by precisext87 View Post
4k was a downpayment for a remodeling job. pretty big. though what usually happens in these situations?
We don't wait 2 months to order materials, that is what usually happens in these situations.
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Old 01-31-2011, 11:38 AM   #7
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Re: Customer Wants To Go To Court


Can you be more specific when you say you used part of the 4k for "job ordering"

There's been cases like this in court when a company begins prep work for a job then the customer cancels at the last minute. So that company loses X amount of dollars in overhead costs that they want back.

I think it boils down to exactly what those overhead costs were, but you are a little unclear as to how you spent that money.
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Old 01-31-2011, 11:40 AM   #8
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Re: Customer Wants To Go To Court


you can't take a down payment for a job that isn't happening and then use that money for something else. you owe her her $4k immediately. the court isn't concerned about the fact that you spent it on other jobs or gave it to charity or anything else. it's hers and the contract sounds like it's void, so do what you gotta do to give it back and avoid court.
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Old 01-31-2011, 11:40 AM   #9
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Re: Customer Wants To Go To Court


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Originally Posted by KennMacMoragh View Post
Can you be more specific when you say you used part of the 4k for "job ordering"

There's been cases like this in court when a company begins prep work for a job then the customer cancels at the last minute. So that company loses X amount of dollars in overhead costs that they want back.

I think it boils down to exactly what those overhead costs were, but you are a little unclear as to how you spent that money.
I think it might be for "other" job ordering.
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Old 01-31-2011, 11:41 AM   #10
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Re: Customer Wants To Go To Court


the downpayment was used in operating expenses. salesmen was paid assuming it was going in, the 4k got eaten up in operating costs by accident.

im paying her back in full after these jobs go in, we did make a mistake but as compensation i wold throw interest on it as compensation. IN court how would this play out?
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Old 01-31-2011, 11:43 AM   #11
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Re: Customer Wants To Go To Court


Quote:
Originally Posted by precisext87 View Post
the downpayment was used in operating expenses. salesmen was paid assuming it was going in, the 4k got eaten up in operating costs by accident.

im paying her back in full after these jobs go in, we did make a mistake but as compensation i wold throw interest on it as compensation. IN court how would this play out?
You would most likely have a judgement against you for the $4k plus any legal and filing fees that she incurred.

Oh yea, and you'd look like an idiot.
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Old 01-31-2011, 11:46 AM   #12
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Re: Customer Wants To Go To Court


.........so you paid for the last job with her down payment?

I call this scenario "riding the wave".......

Paying for the last job with the payment from the new job.


As long as you have money coming in, you can "ride the wave". But as soon as a glitch like this comes up....the wave catches up............wipeout.....
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Old 01-31-2011, 11:49 AM   #13
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Re: Customer Wants To Go To Court


In these parts, HOs have a 3 day right to cancel and contractors are limited to 10% or $1000 deposits - whichever is less. We also have to state in our contracts a start/finish date and significant work or completion must have taken place by those dates. Also, I believe that dollar amount less than $5000 automatically go to small claims court, which only has the authority to say who owes whom, but do not have the authority to make you pay. Basically, she could get a lien against you, but no teeth to make you pay it. Your mileage may vary.

What's going to happen now? Who knows, she may be bluffing to scare you and get her money back or she may be serious and court is pending. The court may side with her and demand her money plus penalties be repaid. The court could also side with you, that you made numerous DOCUMENTED attempts to fulfill the contract but couldn't, thus rendering the contract null and void and you get to keep the money for your troubles.

In the future, you need to be considerably more careful in the type of client you choose. No amount of money is worth hassles like this. Do a search of these forums for how to screen potential clients and stop people like this before you get involved with them!
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Old 01-31-2011, 11:50 AM   #14
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Re: Customer Wants To Go To Court


thanks for the some of the useful answers and not so much for the rude ones. lets all remember than we are humans and we make mistakes, of course since 2007 this was my most problematic issue. and i fine that the more mistakes i make now the more avoid in the future.

-thanks
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Old 01-31-2011, 11:52 AM   #15
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Re: Customer Wants To Go To Court


Quote:
Originally Posted by precisext87 View Post
the 4k got eaten up in operating costs by accident.
That's still really unclear dude, sounds like you're hiding something, you can tell us.
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Old 01-31-2011, 11:53 AM   #16
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Re: Customer Wants To Go To Court


Quote:
Originally Posted by tcleve4911 View Post
.........so you paid for the last job with her down payment?

I call this scenario "riding the wave".......

Paying for the last job with the payment from the new job.


As long as you have money coming in, you can "ride the wave". But as soon as a glitch like this comes up....the wave catches up............wipeout.....
Sounds like "robbing Peter to pay Paul" What a mess. Several contractors her have completely went out of business for these types of practices. Have you looked into a credit line? or a small unsecured loan. You do not want to go to court! Small claims or otherwise. It will get strung out giving you some time to use other "deposits" but in the end is will triple the original amount!
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Old 01-31-2011, 11:54 AM   #17
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Re: Customer Wants To Go To Court


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Originally Posted by aptpupil View Post
you can't take a down payment for a job that isn't happening and then use that money for something else. you owe her her $4k immediately. the court isn't concerned about the fact that you spent it on other jobs or gave it to charity or anything else. it's hers and the contract sounds like it's void, so do what you gotta do to give it back and avoid court.
Sure you can. He doesn't live in Kali.
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Old 01-31-2011, 12:00 PM   #18
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Re: Customer Wants To Go To Court


I sometimes take small down payments when singing a contract that I can't begin work on right away. A down payment that large I would not require until after work has begun.
The whole thing sounds a little shady, no wonder she wants her money back.

In CA you are allowed to charge 15% or $500. witch ever is less, when singing a contract, actual payments don't come until after work has begun.
PAY HER BEFOR YOU GOTO COURT YOU DON'T WANT A REPUTATION OF DOING BUSINESS THAT WAY.
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Old 01-31-2011, 12:00 PM   #19
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Re: Customer Wants To Go To Court


Sounds like a pretty sloppy contract. In NY, her deposit is not legally supposed to be put into your general funds account.

If you can legally pursue and complete the contract, that's one thing. If the contract is void or legally canceled you should do everything possible to come up with with the refund (less admin costs if allowed by contract or contract law in your state). I don't see how you can get an attorney involved and not end up on the hook for several thousand more than what you are on the hook for already.
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Old 01-31-2011, 12:01 PM   #20
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Re: Customer Wants To Go To Court


I would calculate you would have a 0.000321156 chance of winning in court.
Give her her money back before you get in any more trouble because of any additional "mistakes" becoming known.....

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