Fishy deposit problem.

[nicolawelch]

A month ago I agreed to buy an aquarium for £3000, and paid a £1000 deposit to the shop. (the £3000 order was for the glass tank, all the equipment and instalation and fish.). The owner told me that the actual tank would be a special order as all his tanks were manufactured individually to the required size. I was told the order would take 3 weeks for manufacture and installation.

 

After hearing nothing for 3 weeks, I phoned the shop expecting to be told they would commence installation in a couple of days. But I was told that the company making the glass tank, were closing for two weeks the next day (annual holiday shut down), and the tank would arrive a week after they re-open after the holidays. The shop would then instal a week after that.

 

I requested to cancel the contract and have my deposit back.

 

The shop agreed to allow me to cancel the contract, but refused to refund the deposit as there are terms and conditions which state they will keep the deposit. They also state that the terms do not allow time to be of the essence and they have already paid the supplier (eventhough the supplier hasnt commenced production of the tank). The tank is only around £700 of the total price.

 

My questions. Can the shop retain all the deposit, or should they only retain an admin fee? or can they sue for their loss of profits? Should I sue them first?

 

I would think the shop to be in breach of contract if they still need another 4 weeks, and it begs the question why would I have been told 3 weeks if the shop knew their supplier was unable to fulfill the order in time prior to the shut down.

 

Also, if this gets to court and I lose, do they keep the £1000 or do I simply agree to continue the contract and give them the £2000 balance and they fulfil the original order?

[cerberusalert]

If you paid by credit card you can do a 'charge-back'.

[nicolawelch]

Good idea. I did pay by credit card. But have never done a charge back before. Will that open up a route for the retailer to sue me or defend the chargeback?

[cerberusalert]

Will that open up a route for the retailer to sue me or defend the chargeback?

If they tried they wouldn't get far, it's them that's in breach of contract.

 

A contract can be verbal as well as written and they have failed to provide the goods. They cannot keep the whole deposit although they may make an admin charge which reflects appropriately.

[rebel11]

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/3/plastic-cards.htm

[perplexity]

If they tried they wouldn't get far, it's them that's in breach of contract.

 

 

A breach of what?

 

According to the OP,

 

The shop agreed to allow me to cancel the contract, but refused to refund the deposit as there are terms and conditions which state they will keep the deposit.

 

"The shop agreed" suggests to me that the opportunity to cancel was not a part of the original deal, so the eventual agreement to let him off is ex gratia, not a contract, so it's the buyer who breached the contract to purchase.

 

If this was a straightforward contract to purchase, except that the shop agrees to accept a partial payment to be completed when the work is completed and the buyer is satisfied by that; if there was no promise to complete before a particular date, the shop could just as well sue for specific performance, to force the buyer to pay when the job is done.

 

There is no general right to "do a charge-back", regardless of the situation, only to act against a credit card company to the extent that you could against the shop.

 

"..there is an implied term that the supplier will carry out the service within a reasonable time"

[Supply of Goods and Services Act, s.14]

 

but that does not amount to an automatic right to a full refund, nor to appoint yourself as the judge and jury of what is reasonable.

[nicolawelch]

Credit card charge back now applied. Lets see what happens.

[nicolawelch]

Credit card company refusae to allow the charge back. The reason being the fish tank was being made to my size requirement and the delay was not the retailers fault. The retailer has offered a £600 part refund. Hw wants to retain £400 as that is the cost the manufacturer is charging him for the partial costs of cutting the glass (although it had not been assembled when the retailer cancelled the order). Thing is, I would think £400 was the full trade price to the retailer. The manufacturer would not have lost £400.

 

Anyway, I guess it is up to me then to issue a summons against the retailer.

[perplexity]

My questions. Can the shop retain all the deposit, or should they only retain an admin fee? or can they sue for their loss of profits? Should I sue them first?

 

Also, if this gets to court and I lose, do they keep the £1000 or do I simply agree to continue the contract and give them the £2000 balance and they fulfil the original order?

 

 

I am struggling to make sense of what the basis of your claim is supposed to be.

 

If you go to court to claim because of a breach of contract, you therefore claim that the contract is in force and intact.

 

If you agreed with the seller to cancel the contract, there is no contract to enforce. The agreement to cancel would then be a contract to supersede the original.

 

If you rather rescind the contract, the basis of your claim would be misrepresentation, but this may fail to stick if the defendant proves he "had reasonable ground to believe and did believe up to the time the contract was made the facts represented were true".

 

Did you pay a surcharge to have the thing delivered before a certain date? If there was no special consideration, to persuade the retailer to set aside the usual term that time is not of the essence, the 3 week promise would not amount to a contract, to supersede the usual term.

 

It is possible to claim because of a broken promise, but you would have to prove a detriment, an assessable damage because of your reliance.

 

If time was an essential part of the subcontract, between the retailer and the manufacturer, the better chance would be to sue the manufacturer for the breach. With a bit of luck you would then be on the same side as the retailer, with the odds in your favour.

 

The Contracts (Rights of Third Parties) Act provides for this.

[nicolawelch]

We are getting in deeper now. The retailer is now suggesting (after taking advise from trading standards and his solicitor) that if I do not accept the loss of £400 and settle for the £600 offered, he will withdraw his offer of making a £600 refund and sue me for the full value of the purchase price. The suggestion is he will sue me for the £2000 balance. I therefore do not believe he has been advised that. Surely his solicitor will know he can only sue me for his loss of profits at the most, and the loss of actual cost to him that my cancelation has lost him, at the least. And only then, if the court agrees I am in breach by cancelling the order and that he is not in breach by misleading me with a 3 week delivery.

 

The one problem I see is that the aquarium is for display in my retail shop and I am therefore not covered by consumer protection (a business is not a consumer). Of course he may not know that and the court may assume I am a consumer if I do not mention the aquarium is for my shop and not my house.

 

I dont know how the court will feel if having offered to refund me £600, he then withdraws the offer. I have told the retailer to make the refund of £600 and I will then sue him for the £400 difference.

 

I suppose the question is, Do I sue him for £1000 or allow him the sue me for the £2000 balance? If he sues me for £2000, he will lose unless the court agrees he can add an alternative claim limited for the cost of his losses ex profit.

 

If he wins a £2000 claim, he would have had to sue me to complete the purchase, in which case I get a second aquarium (I have already purchased my aquarium elsewhere, having cancelled with the retailer). I dont think he can sue me to complete the purchase, but only for the cost of his loss caused by my cancelation, or an admin fee. (I expect he could succesfully claim his admin fee should at least be the £400 he has been charged by his supplier in their charge for commencing construction of the tank.

 

He says I didnt give him time to rectify the late delivery. ALso the terms of sale precisely stated he was not liable for delays outside his control and deposits were unrefundable. The tank was afterall ordered as a special non stock size (if that matters, as all large tanks are made to order). My claim would rely on the verbal information he gave me at the point I paid the deposit, ie the tank would be ready in 3 weeks. I maintain (and he has agreed) he knew the factory was closing for a 2 week shutdown in 3 weeks and knowing this, he still told me the tank would be ready in 3. He was therefore 100% in control of the advise that for me, clinched him the sale. Stating 3 weeks is an irresponsible statement knowing any delay would become 6 to 8 weeks for delivery. Of course he kept silent about the risk of delay being so long, because he knew I would have purchased elsewhere.

 

I did not sign a contract. I accepted a quotation which had terms and conditions on the reverse and these limit his liability. He couild have promised m the earth and then used his get out of jail free clause, he is not liable for delays outside his control.

 

So, have I a strong enough argument that can be turned into robust particulars of claim? What case law might support me? Should I sue or defend? Should I settle?

Edited August 18, 2011 by nicolawelch

[nicolawelch]

I have just looked up the potential of my loss if I were to be sued for the full purchase price of the oreder. I have found this under remidies for breach of contract (assuming I am the one in breach and not the retailer).

 

"the object of damages is usually to put the injured party into the same financial

position he would have been in had the contract been properly performed."

 

This says that the retailer can sue for the profits plus costs not just the costs or an admin fee.

 

So now I am confused.

 

and I still dont know if I am the guilty party or the retailer.

 

Help !!

[raydetinu]

now you have to be pragmatic about this; do you still want a fish tank? if you cancel this one and have all the hassle to get deposit back or even be sued for the full cost, then you have the cost of placing and waiting for one to be made somewhere else.

maybe it would be better just to negotiate a reduction in the price to take account of the delay? and disruption etc.

[nicolawelch]

When I realised the tank was going to be 7 or 8 weeks, I cancelled and purchased elsewhere. So I dont need another tank.

 

My questions remain unanswered. Do I accept the partial refund? Do I sue him for a full refund? Do I wait for him to sue me?

[martin2006]

Hi nicola

could i ask how much u paid for the alternative tank and also if it is similar to the original one you ordered?

[nicolawelch]

The whole contract was £3000. It comprised £1500 for the tank , pumps and filtering equipment etc, £600 instalation and commisioning, £500 fish and vat. I do not know how much the tank alone would have cost, but guess around £750. Having cancelled the whole contract with the retailer, I went to an enthusiast who undertook the whole contract for the same money, except I now get salt water fish instead of freshwater. Salt water fish and the aquarium and equipment are generally 50% more expensive though, so I reckon I have a bargain price by going to an amateur rather than a business. Indeed, my enthusiast worked in his parents fish shop for a number of years, so he is not really amateur.

[martin2006]

i suppose then its really down to whether you want to get involved with the whole legal process with the original retailer, whether you want to view it as a matter of principle.

Alternatively you could accept the £600 offered and view what you have ended up with as costing in reality £400 more than you paid to the enthusiast, would that still constitute a bargain?

From a legal standpoint, you have placed an order, which the original retailer has acted upon in ordering your specific tank, therefore incurring cost to himself.

i understand your frustration about the delivery timescale and whether or not he knew about the shutdown in advance but in pursuing him legally, you may well be opening yourself up for him to countersue for the full contractual amount.

Either way, you alone will have to decide which way you want to go, for my money and its only my opinion, i think i would try to negotiate the best refund i could, especially after ending up with a far better aquarium and avoid what could be costly court action, common sense will prevail.

 

good luck

[raydetinu]

without doubt Marine a much beter set up, but does come with a few more probs and necessary equipment. congrats. Fish are a whole lot more than freshwater ones.

Do not stock up to quickly, let system mature before adding any exotic stuff ( things can go downhill very quickly ) monitor nitrates etc.

I would concur with Martin about resolving issue of deposit etc.

[nicolawelch]

I think so too. I really wanted salt water fish but the shop quoted £5500 and my budget was £3000. When I was explaining my problem with my friend, she told me about her husbands fish keeping and i had no idea he was semi professional and very happy to solve my problem. I guess i probably jumped ship a little early by cancelling the order as soon as I was aware I could go elsewhere and get the set up I wanted. Especially glad to help a firend who has taken complete mangaement of installing the new equipment. The fish start arriving next week, and I am happy to have paid ultimately £2000 less than the original quote and have a very happy friend who no longer has his own aquarium.

[nicolawelch]

Update. After the retailer emailed and offered to refund £610, I decided to accept it. I emailed my agreement a couple dyas ago, accepting the partial refund and asked him to send me the refund. I have now received a reply by the retailer stating he has withdrawn the offer, because I took too long to reply.

 

I reckon if I took too long to reply, he would have had sufficient time to withdraw his offer first. He did not withdraw his offer until after I accepted it.

 

His final position is now to keep the whole deposit and if I sue him, he will counter claim the whole contract.

 

So, I now intend to issue the summons for £1000 and in the alternative £610.

 

I reckon if he were to win the counter claim, he could only seek his loss of profits and not the whole amount. I reckon on a £3000 contract we could say £500 is vat and not accounted as profit. The profit would be about £1000 anyway. Therefore, by issueing the summons, I dont lose anymore than I have already lost if he retains my deposit. Futhermore, £650 of the contract price was for labour costs for instalation and comissioning the equipment, its difficult to allocate a profit on that sum.

 

I could use some help in selecting the correct law to write into the particulars of claim.

[martin2006]

hi nicola, i think you could use the UTCCR legislation, especially as he knew about the shutdown. I really cant see how his "you took too long to decide" will hold up in court, you are entitled to take any such offer under advice, legal or otherwise.

I would issue a claim for £1000 refund and see what he does, plus court costs.

Its always negotiable down to £610 if your happy with that but gives you room to negotiate, i reckon he would buckle if he thought you were seriously going to court, but thats just what i would do, its obviously for you to decide.

 

Good luck and keep us posted

[locutus]

I'd personally take him to court for £1000, he did not keep to his timescales. He told you 3 weeks, after 3 weeks said it would at least another 2. Simple as that. How the heck could he counterclaim?

 

It was said the day after you started this thread

If they tried they wouldn't get far, it's them that's in breach of contract.

 

A contract can be verbal as well as written and they have failed to provide the goods. They cannot keep the whole deposit although they may make an admin charge which reflects appropriately.

[nicolawelch]

Maybe it is him in breach, but time was not of the essence, so I am weak.

 

I cant use UTCC as I am not a consumer, but bought the aquarium for my shop.

 

I think my post 9 might be important.

[locutus]

The shop breached the contract by not keeping to the agreed timescale. I think he's sensed your indescision and decided to keep the lot. Write a LBA giving 14 days to pay up the full £1000 or it will be £1000 + court costs. If the shop offers something reasonable then accept it.

[nicolawelch]

I know, but time was not of the essence.

[nicolawelch]

Summons now issued.