Deposit on custom jewelry

I took a deposit from a client to make a custom wedding ring. He did not
cancel the job but demanded his money back and said he bought something
somewhere else. Design work had been done and hours spent on my part. I
have offered him store credit but he refused and is taking me to court..

Asked on May 27, 2016 under Business Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Unless you had a cancelation or refund policy under which he could get the money back in certain circumstances, and those circumstances applied, you do not need to return the money. A business is allowed to keep a deposit when a customer pulls out of, cancels, etc. a job unless the customer complied with the business's voluntarily assumed or provided refund, etc. policy. This does not, unfortunately, mean that he can't sue you--it's almost impossible to stop someone from filing a lawsuit, even when the law is against them--and forcing you to defend, but in the situation you describe, where you were honoring your obligations (had done design work, etc.) and the customer just arbitrarily or unilaterally wanted his money back, you would seem to have a good defense and should be able to keep the money.

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