What to do if we signed a contract and wired a deposit to a vendor but the vendor failed to ship out the goods within the shipment date as agreed?
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What to do if we signed a contract and wired a deposit to a vendor but the vendor failed to ship out the goods within the shipment date as agreed?
We gave the vendor a payment option to return the deposit but the vendor disregard and no communication afterward. The vendor’s company is a LLC company. We are worried even we file a lawsuit and have the judgment, we may not be able to get the deposit back. what should we do now.
Asked on July 25, 2014 under Business Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
Legally, you can sue: they would seem to, at a minimum, have breached the contract or agreement (even there was no formal written contract, by sending them money in exchange for goods, a contract to sell you those items was created); they may also be guilty, depending on the facts, of fraud (having lied about what they could or would do) or even conversion (a type of theft; if they deliberately stole your money).
But you identify the main problem: can you collect? It's not hard to collect from established, ongoing LLCs usually, though smaller, struggling, newer, or "fly-by-night" companies may not have any assets to pay and/or may simply close up shop if sued. If they are out of state, it is also more difficult and expensive to sue them to begin with. If there's enough money at stake that it's a "no-brainer" to hire a lawyer to try to get it back, do so; but if the amount is not enough to justify the cost of an attorney, as a practical matter, you may need to write this off. (Talk to an accountant; you may at least get a tax loss out of it.)
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