If a client ordered a custom bed and paid for materials and it is now complete but the client has not paid and wants a refund of the cost for the materials, can I sell the bed to re-coop my lost labor costs?

Asked on August 26, 2015 under Business Law, Colorado

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

If you made the bed to the customer's specifications and otherwise honored the agreement the terms of the order and/or terms of service between you, you only have to refund of the materials cost IF you had a refund policy in place and the customer complied with all its requirements. If you did have such a policy and they complied, you need to refund the way the policy indicates you do. Otherwise, there is no inherent right to refunds refunds are only required, in the absence of a policy, if the vendor/contractor provides a defective or non-conforming product. So if the bed was made to the order, you do not have to refund anything and furthermore, you may sue the custemer for breach of contract--violating their obligation to pay--for the remainder of the money. They are obligated to pay if they don't, you can take legal action.
Alternately, you could treat the contract as breached by the customer's refusal to pay, keep the materials cost, and sell the bed. 
 


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