My friend owns a furniture shop and a lady put down a deposit on a wardrobe and bed?

Question

she then (being of asian dessent) returned to her country for 6 weeks and on returning a few weeks after that decided to drop passed the shop to tell us she no longer wanted the items. My friend told her she was not entitled to have her deposit back as he had her items in storeage for all that time. The items came to £300 and she deposited £80. He has a sign stating deposits are unrefundable and also non-transferrable. Understandably she was very upset and cursed my friends 2 year old son to which my friend told her to go away in no uncertain terms. Who stands where legally?

Answer 1

Your friend has the bases covered. With a written statement saying deposits are not refundable the consumer has no leg to stand on.

Answer 2

The law distinguishes between a deposit and a part payment. The former forfeited if the buyer defaults, the latter is refundable. To decide which it is you will need to look at any documents relating to the sale. For example was a receipt given for the 80 pounds, which described it as a deposit? If there is you have no problem the money is not refundable. If not it might be a part payment you may have a problem. The courts may have to decide, this we be the small claims court. If you do not wish to refund the money do nothing until you get a summons from the small claims court. You do not need a solicitor; all you do is enter a defence, that is give your side of the story. Then wait until are asked to attended court. If your defence is good then the other party may well withdraw the summons.

Answer 3

First, let's separate the issues.
The fact that she "cursed" the 2 year old is deplorable but doesn't add meaning to the issue of the deposit.

In the U.S. the courts do not look kindly upon what is called a "forfeiture".
Had she notified you that she had to leave the country would you have told her that she woulfd forfeit her deposit?
Was she told that she would lose her money after a pre-determined period.
Did you have her sign a contract stating exactly what her time limit would be?
A sign posted obscurely on a wall does not constitute a legal "notification".
She may still have grounds for a lawsuit especially if she had to leave in an emergency.

As a former retailer, I have found that it takes very little to satisfy a customer and possibly have return business for future transactions.
Had you taken the obviously more amenable route and given her a "credit" for a future purchase her return business would have been the more desirable outcome.
You could still have sold the merchandise to someone else and regained your money(which I'm sure you did anyway).

Try not to be so hard on people and maybe you'll profit in more ways than one.

Answer 4

Suggested English law answer: We make contracts day in and day out and they do NOT have to be in writing ( unless related to land and house sales ) although documentation makes it easier to prove what was the intention of the parties. It is widely accepted that a deposit is a sign of an intention to make a legally binding agreement. ( Edit: I should perhaps have put it stronger and said ' a sign of having made and sealing that contract' )The pragmatic ‘solution’ is that the purchaser loses their deposit and the vendor uses it to offset his losses, be they loss of profit, reasonable storage cost, readvertising expenses etc. I do not accept the argument that a sign saying deposits are none refundable is an offence under Misleading Statements Order 1976 ..[ it is an order, not an Act although pretty forceful, made under the Fair Trading Act 1973 ] . The mischief or wrong that the order seeks to prevent is to stop shopkeers saying , pretending to or trying to dissuade a customer with a genuine complaint that they cannot make a claim against the vendor. Emphasis on 'genuine complaint' These genuine rights are to do with misdescribed goods, undisclosed faults and faulty products for which a customer is entitled to refunds. It does not entitle a customer to a refund where they have changed their mind about a purchase. I would argue that the sign saying deposits not refunded is making it quite clear to customers, this shop does not allow you to back out of your contract. After all, if the customer backs out of the purchase and doesn’t take possession of the goods they are logically never going to be in a position to say they were faulty. Whether it is good for business in the long term to insist, as the shop keeper appears to want to do on his strict rights is a matter for him and any future good will. £80 in my view seems a reasonable sum to offset his losses and extra costs. I would also argue that a clear sign on the wall in the shop is better than it being printed on a receipt. Tthe reason being a receipt is just that, it can not be a means of altering the terms on which the money was handed over. That is why, as a broad principle, the small print exclusions on the back of receipt is meaningless.
Edit: As far as the 'Unfair Terms' regulations are concerned, any term is unfair only if it is contrary to the requirements of good faith and it causes a significant imbalance in the rights and obligations of the parties to the detriment of the consumer. Again the mischief the regulations set out to remedy are the typical 'small print' and 'legalise goobblygook' which a consumer would have difficult in understanding. Words in plain language and commonly understood are not unfair terms even if they are standard terms. I suggest we all know what 'deposits are non refundable means' and that is if we renage on the deal the shopkeeper keeps it as compensation for our breach of contract.

Answer 5

In some cases, a sign on the wall may not be enough. Did the store have the customer sign a contract at the time of deposit that explained the terms? If so, the store wins. If not, the customer potentially COULD win in court if the store is unable to prove that the sign was reasonably displayed and clearly visible to the customer at the time and place the deposit was made.

Also, it make be good business sense to refund the customer to avoid harming the business's good name - but that's a decision the business owner needs to make.

Answer 6

If your friend has given anything as a receipt for deposit and the condition that there will be no refund of deposit,your friend stands on firm ground of legality.as you say the lady has returned only after considerable period of time,and has claimed her deposit as she is not willing to buy ,what she has proposed earlier ,and has paid deposit for the same,she is at losing end ,without any other option,since the products would have been blocked by the shop owner as sold or reserved.this could have cost more for the shop owner as he could have missed many chances of having sold those items.I think the lady has understood the position in which she is,and mentally agreed herself to the loss,and due to emotional burst she might have cursed the kid.i would have scolded if i were there when this incident occur ed.your friend wins ,my sympathy and support.

Answer 7

Statements such as 'no refunds' or 'deposits are non refundable' are unlawful under the Consumer Transactions (Restrictions on Statements) Order 1976, because it resticts a buyers statutory rights. They are also unenforceable under The Unfair Terms in Consumer Contracts Regulations 1999 because they are not negotiated with an indivdual.

If a shop is to have a 'non refundable deposit' policy it must be incorporated into a contract of sale in terms of damages for breach of contract, i.e. not completing the sale.

The law in this area is muddied by the fact that it could be argued to be an implied term in all sales, but without a contract or terms of sale it would be uneconomic litigation in such a small claim.

Answer 8

Isn't this the whole point of having a deposit? To pay the storekeeper for inconvenience in case someone backs out of a sale?

Answer 9

Personally, providing all the bases are covered with regard to proper notification of loss of deposit if sale is not completed I would also consider small claims action for loss of the whole sale

Answer 10

The law rightfully sits on the side of the shop-owner; your friend.

However, in your question, I think you could and should have left the race/ethnicity side of things out.