[Question] Any recourse possible when a customer cancels an order?

[BusFact]

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?

[AmithS]

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!

[Dave A]

- 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.

[Blurock]

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.

[AndyD]

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.

[shani]

I would say : i learned a lot.
Integrity is the most important thing in business.

[Newretailer]

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.

[Blurock]

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.