Results 1 to 8 of 8

Thread: Any recourse possible when a customer cancels an order?

  1. #1
    Gold Member
    Join Date
    Jun 2010
    Location
    Johannesburg
    Posts
    832
    Thanks
    180
    Thanked 176 Times in 145 Posts

    Any recourse possible when a customer cancels an order?

    For those of you who make custom made products for your customers, what do you do when a customer cancels the order at the last minute.

    Here is the scenario:

    - Customer has placed a written order (Value just under R10k).
    - Product is made specifically for this customer, its of no use to anyone else.
    - In this particular case no deposit has been made, (complicated explanation) but for this example assume common business practice and a deposit has been paid, but it doesn't really cover all costs.
    - Customer cancels the order the day before delivery is due. The product is essentially finished.
    - There is nothing defective about the product, customer simply decided to get elsewhere. Probably due to a slightly better price.
    - No terms and conditions signed.

    What recourse does the manufacturer have?

    I make stock standard products and so simply return them to stock when this happens. Which means I have limited experience in these situations. My guess is that it needs to be chalked up to experience and that the deposit needs to be increased (difficult) and that a formal standard format contract needs to be signed with each order.

    How do you guys deal with situations like the above?

  2. #2
    Gold Member Singhms's Avatar
    Join Date
    Oct 2008
    Location
    Pretoria (National)
    Posts
    976
    Thanks
    161
    Thanked 52 Times in 48 Posts
    I have not been in a situation like this before, but I would definitely go the route of having a standard set of T&C's and deposits for orders that has to be accepted by all customers before work commences!

    Almost every supplier if not all I deal with have some sort of T&C's even if you pay 100% upfront!

  3. Thanks given for this post:

    BusFact (07-Sep-11)

  4. #3
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,979
    Thanks
    3,055
    Thanked 2,462 Times in 2,067 Posts
    Blog Entries
    12
    Quote Originally Posted by BusFact View Post
    - Customer has placed a written order (Value just under R10k).
    That's a contract, you know. It's just full of common law implications.

    Not sure of the CPA impact off-hand, but certainly before the CPA you'd have a pretty iron-clad case to claim due performance or damages. Just the normal legal-cost-vs-return and goodwill issues to consider.
    The trouble with opportunity is it normally comes dressed up as work.

  5. Thanks given for this post:

    BusFact (07-Sep-11)

  6. #4
    Diamond Member Blurock's Avatar
    Join Date
    May 2010
    Location
    Durban
    Posts
    3,437
    Thanks
    660
    Thanked 765 Times in 630 Posts
    Blog Entries
    1
    I agree with DaveA. A custom made product is different from a shelf product. Seek legal advice. The order is an instruction and is the first leg of the contract. If you have performed in terms of the agreement and not delayed manufacturing and delivery, you should be able to claim for cost and damages.
    Excellence is not a skill; its an attitude...

  7. #5
    Diamond Member AndyD's Avatar
    Join Date
    Jan 2010
    Location
    Cape Town
    Posts
    4,403
    Thanks
    513
    Thanked 854 Times in 687 Posts
    Obviously to you it makes a difference that the product was made to order but from a legal perspective I don't see there being a difference between custom made or off the shelf. As Dave says you have a contract and you've fulfilled your side so you have the usual legal avenues at your disposal.
    _______________________________________________
    I am special and so is Vanash.
    _______________________________________________

  8. #6
    Full Member shani's Avatar
    Join Date
    Sep 2011
    Location
    Humen town,Dongguan city,Guangdong, China
    Posts
    65
    Thanks
    4
    Thanked 2 Times in 2 Posts
    I would say : i learned a lot.
    Integrity is the most important thing in business.
    http://yihaolamp.com
    professional in indoor lamps manufacture

  9. #7
    Bronze Member
    Join Date
    Jun 2011
    Location
    JHB
    Posts
    195
    Thanks
    67
    Thanked 28 Times in 26 Posts
    I do a fair amount of special orders and I learnt the hard way not to start manufacturing until I received at least enough deposit to cover all my costs (I go for 50%). I state clearly in my terms that no work will commence until I have received the deposit. So far I have not been in a situation where a customer tried to cancel after a deposit has been paid. Customer don't question the deposit and pay it quite willingly.

    I hope you get this sorted out to your satisfaction.

  10. #8
    Diamond Member Blurock's Avatar
    Join Date
    May 2010
    Location
    Durban
    Posts
    3,437
    Thanks
    660
    Thanked 765 Times in 630 Posts
    Blog Entries
    1
    Quote Originally Posted by Newretailer View Post
    I do a fair amount of special orders and I learnt the hard way not to start manufacturing until I received at least enough deposit to cover all my costs (I go for 50%). I state clearly in my terms that no work will commence until I have received the deposit. So far I have not been in a situation where a customer tried to cancel after a deposit has been paid. Customer don't question the deposit and pay it quite willingly.

    I hope you get this sorted out to your satisfaction.
    Always the best way to go.
    Excellence is not a skill; its an attitude...

Similar Threads

  1. [Question] Non-payment of salary - what recourse to employee
    By Morticia in forum General Business Forum
    Replies: 8
    Last Post: 28-Oct-11, 09:25 AM
  2. Recourse for salary not paid by employer?
    By Camille in forum Labour Relations and Legislation Forum
    Replies: 14
    Last Post: 08-Feb-11, 09:45 PM
  3. What recourse for Freelance sales person not paid earned commission
    By Versatile Marketing in forum Labour Relations and Legislation Forum
    Replies: 11
    Last Post: 08-Mar-10, 01:15 PM
  4. unhappy customer
    By murdock in forum Electrical Contracting Industry Forum
    Replies: 23
    Last Post: 23-Jul-08, 10:35 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •