If I owned a massage therapy business but had to close it, am I obligated to refund money to people who have gift certificates that they have yet to redeem?

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If I owned a massage therapy business but had to close it, am I obligated to refund money to people who have gift certificates that they have yet to redeem?

I can no longer provide services due to back surgery.

Asked on May 20, 2014 under Business Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Yes, you would typically have to refund money which has been paid for gift certificiates but which cannot be used or redeemed; you are in breach of contract by not providing the services paid for. If the business was a corporation or LLC, you would not be personally liable for the amount--they could only sue the corporation or LLC, not you personally. If however the business was not a corporation or LLC, you could be personally sued by anyone seeking a refund who does not get it.


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