Party a Pre-Orders a Product from Party B, Waits 11 Months, then Has Order Canceled
My question involves a consumer law issue in the State of: Missouri
Full disclosure, My motivation is to help educate a community on their rights when ordering specialized hardware they use to generate revenue.
So here's the scenario:
Consumer A (not me) goes to a web (Company B) site offering pre-order sales of specialize computer hardware they developing (this hardware is a means to earn money).
Consumer A decides to purchase during purchase is is clearly stated "Delivery Date is currently schedule for October" (2012).
Company B gets to October and pushes their deadline to January/February because of supply line and design issues.
Company B tells the customers about the delay.
Consumer A is reasonably frustrated.
A continuous series of delays (supply line problems, modifications to design, etc) causes Company B to continuously adjust delivery (as in "we're unfortunately thinking it'll be done in two weeks" again and again).
Sometime around May Company B begins to produce small quantities of product and begins to ramp up production.
Meanwhile, Customer A is growing more and more irate. He begins to complain on the community forums. Says he's getting tired of the "lies". Says he doesn't know if he's ever going to get his product.
It's quite irate, beyond just "This delay is pissing me off".
Company B grow weary of this. They send an email to Customer A stating "It has been relayed to me that you are unhappy with our company and I was asked to cancel your orders. If you would send me an address I will send your money back to you ASAP."
Customer A goes ballistic on the Companies community chat site, threatens legal action, posts about how the company has the worst customer relations he's ever seen, and starts an ad campaign on the community site linking all of his claims.
Customer A and some community members claim this is breach of implied contract under Missouri UCC code
So that's the scenario (tried to be brief but expressive). Here's what the community is fixated on:
Quote:
400.2-711. (1) Where the seller fails to make delivery or repudiates or the buyer rightfully rejects or justifiably revokes acceptance then with respect to any goods involved, and with respect to the whole if the breach goes to the whole contract (section 400.2-612), the buyer may cancel and whether or not he has done so may in addition to recovering so much of the price as has been paid
(a) "cover" and have damages under section 400.2-712 as to all the goods affected whether or not they have been identified to the contract; or
(b) recover damages for nondelivery as provided in this article (section 400.2-713).
(2) Where the seller fails to deliver or repudiates the buyer may also
(a) if the goods have been identified recover them as provided in this article (section 400.2-502); or
(b) in a proper case obtain specific performance or replevy the goods as provided in this article (section 400.2-716).
(3) On rightful rejection or justifiable revocation of acceptance a buyer has a security interest in goods in his possession or control for any payments made on their price and any expenses reasonably incurred in their inspection, receipt, transportation, care and custody and may hold such goods and resell them in like manner as an aggrieved seller (section 400.2-706).
So I hoping to help the community better understand consumer rights when purchasing hardware. Here are some of the questions I'd like to talk about:
- Can the company just cancel an order that was paid for and waited on for 11 months?
- Is this actually breach of implied contract or any other kind of contract?
- Does "seller fails to make delivery or repudiates" apply to this? Why or Why not?
- Does cancellation alleviate any future obligation of the company?
- I'm pretty certain from my reading/understand, any past breach/fraud is not protected, but if cancellation isn't legal what does it mean to the company/customer?
- Anthing anybody else might add to help me educate, would be greatly appreciated :)
Thanks :)
-- Monica
Re: Party a Pre-Orders a Product from Party B, Waits 11 Months, then Has Order Cancel
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Endlessa
Can the company just cancel an order that was paid for and waited on for 11 months?
Of course the company CAN cancel the order. It already DID cancel the order.
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Endlessa
Is this actually breach of implied contract or any other kind of contract?
Depends on the terms and conditions of the contract and whether there was even a contract in the first place.
"Delivery Date is currently schedule for October" (2012) is so vague as to be meaningless. Seems tentative to me and implies that there might be future changes in the delivery schedule.
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Endlessa
Does "seller fails to make delivery or repudiates" apply to this? Why or Why not?
I have no idea what you are asking there. But, in the absence of a guaranteed deliver date, I don't see where the buyer has any other options but to cancel his order and go elsewhere or wait until the product is available. And the seller can certainly opt to cancel the order and refund the money if the customer turns out to be an ahole who spreads his vitriole all over the internet.
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Endlessa
Does cancellation alleviate any future obligation of the company?
Yes.
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Endlessa
I'm pretty certain from my reading/understand, any past breach/fraud is not protected, but if cancellation isn't legal what does it mean to the company/customer?
There is nothing in the limited information you posted that would indicate that any illegality occurred so you'll have to excuse me for avoiding hypothetical questions.
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Endlessa
Anything anybody else might add to help me educate, would be greatly appreciated :)
At this point, if the customer believes there was a breach he can file a lawsuit, either on his own or by hiring a lawyer.
Re: Party a Pre-Orders a Product from Party B, Waits 11 Months, then Has Order Cancel
Thanks for the response :)
I agree with what your saying here. I need somebody to check my work a bit and let me know if I missed something obvious.
To be clear there was no explicit contract, the buyer feels there was an implied contract by clicking the pre-order button and sending money and that a business could not cancel his order legally.
Brief Summary of my take-away:
I've been trying to explain to the community that pre-paying does not obligate a company to do business with you if they don't want to, even if you've already transferred funds. It only obligates them to give you a product or a refund. In other words, the only legal guarantee is that they can't run away with your money without delivery or refund. (well they can technically, but it would be illegal at that point) I've also argued refunding of money terminates any obligation implied by clicking the button to "pre-order". "Delivery Date is currently schedule for October" is extraordinarily useless to and basically does nothing for the consumer other than say this will one day show up on your door. My interpretation of this is exactly what you stated, Either wait it out or do business elsewhere. If they refund and don't want to do business with you, that's just that, take your money and walk. You seem to have confirmed this.
One last question, if you would be so kind. The Company states "No refunds" and that the customer can request one, and it may be granted, but the company may also refuse. Is this legal also? I'm under the impression that when your order something with a clear notification of refund policy it pretty much implies acceptance. Aside from known "cool down" laws, which obviously don't apply in this case, there really is no recourse, but to wait or the business can refund your money (terminate relations). Am I interpreting all this properly?
And, again, thank you helping another community understand this :) cheers :)
-- Monica
Re: Party a Pre-Orders a Product from Party B, Waits 11 Months, then Has Order Cancel
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Endlessa
To be clear there was no explicit contract, the buyer feels there was an implied contract by clicking the pre-order button and sending money and that a business could not cancel his order legally.
The buyer is in error.
Especially considering the phrase quoted earlier:
"Delivery Date is currently schedule for October" (2012).
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Endlessa
Brief Summary of my take-away:
I've been trying to explain to the community that pre-paying does not obligate a company to do business with you if they don't want to, even if you've already transferred funds. It only obligates them to give you a product or a refund. In other words, the only legal guarantee is that they can't run away with your money without delivery or refund. (well they can technically, but it would be illegal at that point) I've also argued refunding of money terminates any obligation implied by clicking the button to "pre-order". "Delivery Date is currently schedule for October" is extraordinarily useless to and basically does nothing for the consumer other than say this will one day show up on your door. My interpretation of this is exactly what you stated, Either wait it out or do business elsewhere. If they refund and don't want to do business with you, that's just that, take your money and walk. You seem to have confirmed this.
I basically agree with that.
But you have to understand that their could be other factors involved that we don't know about. Generally, when you buy something online there are Terms of Service displayed on the site that may include all sorts of disclaimers. Many will just click "I agree" without bothering to read them.
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Endlessa
One last question, if you would be so kind. The Company states "No refunds" and that the customer can request one, and it may be granted, but the company may also refuse. Is this legal also? I'm under the impression that when your order something with a clear notification of refund policy it pretty much implies acceptance. Aside from known "cool down" laws, which obviously don't apply in this case, there really is no recourse, but to wait or the business can refund your money (terminate relations). Am I interpreting all this properly?
Pretty much, although overly simplified.
A "no refund" policy is legal but it is not absolute. There are ways that a buyer can be entitled to a refund in spite of a "no refund" policy. Breach of contract and defective product comes to mind. There may be others.
And a "no refund" policy certainly doesn't prevent the seller from choosing to cancel the sale and give a refund, provided that the sale wasn't actually a done deal. Which, in this case, it didn't appear to be.
But there's another concept in contract law that you can google. It's called "detrimental reliance." You'll see why it could be an issue with pre-purchasing. However, I don't think it applies here.
I suggest that your "community" avoid pre-purchasing anything. Either wait until the product is available or buy a similar product that's already available from somewhere else.
That way they can avoid becoming irrational over having their money tied up for no good reason.
Re: Party a Pre-Orders a Product from Party B, Waits 11 Months, then Has Order Cancel
Find another source to make your "fortune" in bit coins Monica.:cocksure: