Good will payments

weealia

I am a small start up business and I requested a non-refundable deposit from 2 friends which they paid - It stated it clearly on their quotes that the deposit was non refundable.

Since this they don't have money to go ahead with the remained of the payment and want to pull out - which is fine and they wouldn't incur any further costs.

They are now requesting a full refund as they have both changed their mind however - I have costs to cover with 80% of the deposit monies so I will not refund them.

Today I received a letter stating that they paid me these monies as a guesture of good will and not as a non-refundable deposit. (they have issued nothing in writing/electronically or otherwise with this goodwill wording).

1. Are goodwill payments ever made from constomer to a company are booking stage?
2. Can they legally do this?
3. What are my rights?

Thanks in advance for your help

Foggster

If you clearly stated that they were non-refundable deposits then I cannot think why they would have any legal right for a refund. If they wish to pursue then send them a breakdown of how the deposits are going to be spent i.e. 80% as well as the fact that you have 2 additional "slots" to advertise and try to fill since they are not fulfilling their obligations.

martindow

Friends and business can lead to problems as you have found.

If they are friends you need to talk to them and explain that you have incurred costs and maybe offer to give them the 20% back as a goodwill payment. If they are acquaintances and you would not worry too much if they didn't want to speak to you again point them towards the wording on your contract.

Mistral001

martindow wrote: »

Friends and business can lead to problems as you have found.

I agree, I have been self-employed for 14 years and one rule I have is never to do buiness with friends or relatives.

Judging by the letters you have received, they are likely to be ex-friends rather than friends so I would not refund them the money and strike them off your Christmas card list.

Learn from the experience and just make a policy of not doing business with friends or relatives unless you have staff. If you have staff, you can get the relative or friend to deal with the staff member rather than yourself. That way, they will get the message that you are doing business with them. Some might be slightly offended, that they are not getting your absolute personal attention, but better slightly offended now than falling out completely later. I used to work for a small firm and my boss stuck strickly to this policy and it worked well.