Law Question

willo · 25-05-2004, 13:25

No forum for this thread so I'm posting it here.

If I ordered some goods, lets say furniture, from a company and payed 40% up-front, then received delivery and was happy with the goods but the company went bankrupt before I payed the balance, who would I owe the money to?

Then if the supplier of the goods to the business I purchased off asked me for the money and said they would come and take the furniture away if I didn't pay, what would be my legal position.

**Chris** · 25-05-2004, 13:32

Quote:

Originally Posted by willo

No forum for this thread so I'm posting it here.

If I ordered some goods, lets say furniture, from a company and payed 40% up-front, then received delivery and was happy with the goods but the company went bankrupt before I payed the balance, who would I owe the money to?

Then if the supplier of the goods to the business I purchased off asked me for the money and said they would come and take the furniture away if I didn't pay, what would be my legal position.

AFAIK You have a contract with the company you bought the furniture from, not their suppliers. The supplier has no right to take anything from you.

Although the company you bought the furniture from has gone bankrupt, so far as I'm aware you still owe them the money. The company will be placed under the control of the official receiver whose job it is to sell of all the remaining assets, raise money and pay of creditors. The receiver may contact you to get you to pay what you owe.

I would imagine the manufacturer of the furniture is impatient with this process and is trying to get its money back more quickly by bullying you. They may think they stand a better chance of getting all of the money they are owed this way - it's unlikely any of the bankrupt company's creditors will get 100% of what they are owed once the liquidation process is complete.

If you pay any money to the supplier, this will not prevent the official receiver from demanding the money from you as well. Don't hand over a penny. If they get stroppy, go to your local CAB to get official advice. That will almost certainly scare them off because I suspect they are well aware they don't have a legal leg to stand on.

**Rob** · 25-05-2004, 13:33

Havinbg received the goods, for which you hadn't fully paid, you would be seen as an assett of the bankrupt company. It's likely that you would have to pay to the receiver of the company.

As for the supplier who made the goods, you would need to understand the ownership of them. Normally a supplier will have a contract with the shop that sells to you. That is independent of the contract the shop has with you. Therefore payment arrangements are separate. Small print in the contract might, just, change that, but since you will rarely see the supplier to shop contract, you cannot expect to know of it's ins an outs, unless specific terms are printed in your sales agreement.

* edit: beaten to it

willo · 25-05-2004, 13:39

Thanks people, I'm currently sitting tight asking for the administrator or liquidator to contact me, but it's still worrying.

**Chris** · 25-05-2004, 13:41

Quote:

Originally Posted by willo

Thanks people, I'm currently sitting tight asking for the administrator or liquidator to contact me, but it's still worrying.

I bet. Are the companies involved what you would describe as reputable, or has this 'threat' from the manufacturer come in the form of a bottle through your front window?

**Rob** · 25-05-2004, 13:43

Keep sitting tight. It can take some time for liquidator / receivers to work their way through the books, especially those of a bankrupt company. After all if their accounts were good they would lilkely not have got into such a mess.

Be happy to keep the money in your account and earn the pittance of interest on it till the legitimate person correctly demands it. Meanwhile, you have the goods - possession is 9/10ths of the law!

ian@huth · 25-05-2004, 13:54

It could very well be that the supplier of the goods to the merchant that you bought from had a clause in their contract saying that ownership of the goods remains with the supplier until paid for. That means that if the merchant hasn't paid his supplier for the goods that the supplier may have the right to reclaim the goods. This could mean that if the supplier did reclaim the goods then you would have lost the goods and probably lost the 40% deposit that you gave. I would check the position out with the CAB.

**Chris** · 25-05-2004, 13:57

Quote:

Originally Posted by ianathuth

It could very well be that the supplier of the goods to the merchant that you bought from had a clause in their contract saying that ownership of the goods remains with the supplier until paid for. That means that if the merchant hasn't paid his supplier for the goods that the supplier may have the right to reclaim the goods. This could mean that if the supplier did reclaim the goods then you would have lost the goods and probably lost the 40% deposit that you gave. I would check the position out with the CAB.

If this is the case, then you become a creditor of the company and need to make the liquidator aware that you are owed money. But as Ian says, a word with the CAB would be a good move at this point.

orangebird · 25-05-2004, 14:02

Quote:

Originally Posted by willo

No forum for this thread so I'm posting it here.

If I ordered some goods, lets say furniture, from a company and payed 40% up-front, then received delivery and was happy with the goods but the company went bankrupt before I payed the balance, who would I owe the money to?

Then if the supplier of the goods to the business I purchased off asked me for the money and said they would come and take the furniture away if I didn't pay, what would be my legal position.

You still owe the money, but only to the admnistrators of the company you purchased the goods from, not the original supplier. Do NOT pay anyone anything until the administrators contact you. The orginal supplier has no legal rights whatsoever to deal with you direct and take the furniture from you. They will have to sit in line and wait for the administrators to pay them.

andygrif · 25-05-2004, 14:30

Pretty much everything on here is correct. You have no contract with the manufacturer (unless you bought these goods from them) or anyone else apart from the people you ordered the goods from and now their liquidators.

It sounds as if they were not paid by the company that went bust, and are now trying to recoup some of their losses. I bet there will be some people that will pay them too and then will be shocked to find themselves still owing money to the receivers.

If you're at all worried about the process can I suggest that you take photocopies of all your existing documentation, such as contract, t&cs, receipt for the deposit, delivery advice etc., package it all up to the recievers with a cheque for the remaining 60% (as long as you're happy with the goods of course) with a covering letter saying that as a debtor of the former company you are settling this debt and expect to hear no more from them. Ever! Be sure to send the letter Special Delivery, as you can trace it online - print out the fact it was delivered.

As long as they cash the cheque, keep your bank statement, then you have proof that you have paid and can sleep easy at night.

Also if the suppliers call round again you can prove very simply that there is no outstanding debt and that they must take their place in the of creditors like everyone else.

Of course if you're a betting man, keep silent and see if the liquidators ask you for the money. If they don't you got the goods for less than half price!

willo · 25-05-2004, 14:30

The 'owner' is now saying that there is no Liquidator or Administrator, he is selling the business and will soon be trading with new owners, I've said that the new owners could chase me for the debt so I want to go to court to make sure that who ever I pay it will be the end of the matter.

Honestly this is a pain the 'owner' tried to get me to pay the money into his personal account a couple of months ago and is contacting me via hotmail!

andygrif · 25-05-2004, 14:37

All sounds a little shady. I believe that a new company can purchase the old company as an ongoing concern complete withg old debts. I certainly would not want to pay anything to the old owner as it is highly possible the new owner will also be asking you for payment.

Is the company you're dealing with a Limited company, i.e. if you searched on Companies House would they be there?
http://www.companieshouse.gov.uk

**Chris** · 25-05-2004, 14:41

Quote:

Originally Posted by willo

The 'owner' is now saying that there is no Liquidator or Administrator, he is selling the business and will soon be trading with new owners, I've said that the new owners could chase me for the debt so I want to go to court to make sure that who ever I pay it will be the end of the matter.

Honestly this is a pain the 'owner' tried to get me to pay the money into his personal account a couple of months ago and is contacting me via hotmail!

If the business has filed for bankruptcy, there is a receiver. This is a legal requirement, and it is also a standard part of the legal process. If I understand it correctly, a receiver is called in if you go bankrupt whether you like it or not. So he is either lying about filing for bankruptcy, or he is lying about there not being a receiver. Possibly it is the latter, if he has been trying to get you to pay the money to him personally. Naturally you did not agree to his request, as your debt is to the company he owns, not to him.

willo · 25-05-2004, 15:00

I am informed that the business 'is no longer accepting new orders' and is being sold although there is no company bank account (closed), no-one answering the phone, website gone, email address bounced etc. The description of the status of the business changes every month or so which is how often the 'owner' (sole trader, im now informed although he has started calling the business an organisation) emails me and ask for money. He has tried to decieve me several times with information and I can't believe a damn thing i'm being told at the moment. Just going to try to push this into court for a resolution. I'm taking the position that they have to take me to court although I don't want to run up any major costs I only owe about ÃƒÆ’Ã†â€™ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡ÃƒÆ’Ã¢â‚¬Å¡Ãƒâ€šÃ‚Â£600.

Thanks everyone for the helpful advice, just crossing my fingers now and hoping it all works out in the end. The owner is ominously threatening 'passing the matter on to his brother'.

orangebird · 25-05-2004, 15:00

Quote:

Originally Posted by willo

The 'owner' is now saying that there is no Liquidator or Administrator, he is selling the business and will soon be trading with new owners, I've said that the new owners could chase me for the debt so I want to go to court to make sure that who ever I pay it will be the end of the matter.

Honestly this is a pain the 'owner' tried to get me to pay the money into his personal account a couple of months ago and is contacting me via hotmail!

He is lying, big time. Don't pay a penny to anybody!