Can I withhold inventory as liquidated damages

Get Legal Help Today

 Secured with SHA-256 Encryption

Can I withhold inventory as liquidated damages

I was offered a sales and marketing independent contractor position in
November. The term was to be for one year, with the option to extend. My fixed
consulting fee was to be paid in advance monthly. My tasks were to create a
sales channel including Amazon, and dealers. I have done both of these things.
The company is based in The Netherlands. On Wednesday I was informed by them
that they will no longer pay my consulting fee, and want to change our
agreement so that I am paid commission only. I was supposed to receive my
monthly fee today, but they will not pay it. I have not agreed to the
commission change they requested.

I am in possession of around 200K in inventory that they shipped me to fulfill
orders. There is no signed contract in regards to the inventory. I did not sign
anything stating that I would reimburse them for it, nor did I sign anything
stating I would return the inventory if our agreement ended. Am I obligated to
return the inventory to them, or can I use the inventory to collect damages
against what is owed to me? Can you file criminal charges, or would this be a
civil issue?

Asked on April 3, 2017 under Business Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

You can *only* withhold another's property if there is a written agreement giving you a security interest in that property for a debt or obligation, or otherwise allowing you to offset it vs. amounts owed you. In the absence of such an agreement, you have no right to withhold, take, etc. their inventory; if you do, not only could they sue you its value, but since what you will be doing is theft, they could file criminal charges against you, too.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption