Under what conditions must money paid pursuant to a contract be refunded?

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Under what conditions must money paid pursuant to a contract be refunded?

I do event decorating and a client paid me her deposit of $350 via credit card. The contract states that the deposit is non-refundable and prices are subject to change without notice. The draping she wanted cost $140 more then the original quote and she now wants her deposit back. She emailed me to say that she signed and mailed the contract and sent an additional payment with it. Now that she wants her deposit back due to the price change and she is claiming she never signed the contract so I can’t keep her money. I am wiling l to give her back $200 but she wants all of her money. Do I have to refund her entire deposit.

Asked on September 27, 2010 under Business Law, Maryland

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Since the contract states that the deposit is nonrefundable and prices are subject to change without notice, you could argue that you do not need to refund anything.  The client signed the contract and is bound by those terms.  Her acceptance of the contract occurred when she signed and mailed the contract to you.  Acceptance of the contract is effective upon dispatch (here when it was placed in the mail).  Acceptance means agreement to the terms of the contract and communicating that acceptance to you which occurred via e-mail. Additional evidence of her acceptance of the contract is her sending an additional payment. She is now falsely claiming that she didn't sign the contract.  Falsely claiming that she didn't sign the contract would be an invalid revocation of her acceptance.  Therefore, you could argue that her acceptance of the contract is still in effect and she is bound by the terms of the agreement.  The general rule is that if there has been an acceptance and a revocation of the acceptance, whichever you receive first is controlling.  In this case, you could argue that since she falsely claims to have not signed the contract, the revocation is invalid and therefore the acceptance of the contract is still valid and in effect. 


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