Customer cancelled bespoke item

[palomapear]

Could one of our friendly lawyers please give an opinion on this?
I'm going to be vague but hopefully you will get the principle.

DH makes bespoke things for a job. He is one of only a few make this type of item and they are for specialist hobbies.
He has a waiting list as they are all handmade. when customers order he gives an approximate date it will be ready. The waitIng list can be 2 years or so. The items cost a few thousand.
Customers can vary the type of things want and he will build it.
If it was cars it would things like an extra sunroof, or metallic paint or more wheels.

The last order was very late in being delivered due to DH looking after his elderly disabled father. When it was ready we gave the customer the opportunity to cancel and receive the deposit back or said we would deliver it for free ( 200miles, needs to be hand transported).

Customer said they still wanted it. However in the time the customer waited they had an accident and are now partially disabled (probably temporarily but age is a factor ) making it difficult for them to use the item. They have other items of a similar nature they can use but the one DH made takes more strength / ability to use as it's slightly larger. Customer or DH would,not have known until customer tried the item. DH can use it fine as could most able bodied people, older children etc. The customer is in their 70s.

There aren't any contracts as everything in this field is done on word of mouth, professional reputation etc.

The customer had her item for 24 hours and doesn't like it/ can't work it. We could see they had difficulty using it when it was set up but if they regained some strength ( which is likely). DH has suggested fitting an extra part to it to make it more automatic but they declined.

What should we do? It's a small field and we don't want any bad feeling. DH already feels guilty as it was so late being made. We also do not want any repercussions to DH's reputation. If we went to get it back we could advertise and it would sell eventually but not likely to be quickly. We would have to advertise it at less than we charged the commissioning customer as it's bespoke and things they asked for may not appeal to anyone else.

Stuck between a rock and a hard place. We have never needed a business solicitor before.
Thoughts please? Thanks.

difficult... this is why people draw up contracts before beginning bespoke work!
Is it his job or a hobby? Can you afford to write it off?

I’m not legally trained so this is my opinion....

A verbal agreement was entered into. Your husband did offer to cancel that agreement but the customer declined.

These are bespoke items made to the customers specification. On receipt the customer now wishes to cancel (I presume you have been paid for the item)? I am also presuming the item can’t easily be sold on as it is bespoke.

I don’t believe the customer is entitled to a refund. Under the sale of goods act, customers aren’t entitled to a refund because they have changed their mind. It’s not your ‘fault’ that the customer can’t use the item. It’s not faulty / defective.

I think it would be worth drawing up contracts for future transactions.

Seriously tricky without a written contract! Could you agree with the customer that you will advertise it for sale, they keep it in the meantime, and then if/when it sells they get whatever you sold it for? If they are reasonable they must understand that your husband has invested time and materials in this and while it's not their fault they've become disabled it's not his either.

Whatever the legal answer the right answer for your business is to take it back and refund the customer, hopefully eventually recouping some money by selling it on.

The bad publicity you risk getting from not giving your now disabled customer a refund is not worth it.

In future set out the terms and conditions of sale clearly and get customers to sign a binding contract where they understand the refund policy before placing an order.

Commission work is a mine field and requires a really good contract to back it up.

TBH I think because the item was very late, you have less of a claim to demand the client buys the item and pays in full. Therefore you should take it and back and try to sell on, or dismantle for parts. How would you have handled the situation if the client's condition had changed during the standard production period?

I avoid commissions but will take them on occasion and I know I irritated the last person to commission as I went back a few times to clarify exactly what was required. I think you seriously need to put things in writing, such as time scales for delivery, cancellations and changes in circumstances. If the word 'contract' sounds too legalistic, use the word 'specification' instead - that's what I do.

Thanks MrsChollySawcutt. I think that's what my gut instinct is.

But we may need to sell the item before we refund. We received full payment before delivery.
We had a deposit, part payment, things then went pear shaped for DH and customer.

DH has been running his business for 30 years. I think we need someone legal to draw up a proforma type simple contract going forward.

DPotter all DHs work is bespoke commissions. I think maybe we should type up a standard letter of terms to send with the deposit invoice?

You don't need to get someone legal to draw it up. It's easy. You need terms and conditions to cover custom built items and distance selling. Look on any e-commerce website, you'll find them (and you need to comply with distance selling regulations for all orders where the client is not stood in front of you at the time of transaction, so phone, email, etc) I also think you'd be wise to get the client to sign your terms and conditions if the products are expensive and take that long to make.

I run an e-commerce site and occasionally we do custom orders. Our terms and conditions clearly state we will not accept a cancellation or return of a custom order.

As it stands, I don't think you have a leg to stand on. You failed to deliver on time and you have no contract to say you won't refund the item. If the client takes you to court & wins, you'll be told to pay up, not wait to sell the item before you refund - your cashflow isn't the clients problem.

There aren't any contracts

Yes there are. It may not be a written contract but there is clearly a contract.

As this is a bespoke item the law is that you only have to offer a refund if the item is faulty. The customer ordered it. It is not your husband's fault that they had an accident. Your husband is entitled to be paid in full for the item. Of course, he can take the item back and provide a refund if he thinks that is the right thing to do in this situation. But legally he does not have to.

No legal knowledge but my instinct is to say - take it back in good grace. Your DH had a difficult situation which made him unable to honour his part of the verbal agreement (delivery on time) and your customer had a difficult situation (loss of mobility) which means the item is no longer suitable for them.

And always get a contract signed for bespoke work in future

Some of the advice on here is awful. The SoGA hasn't been in effect since 2015! The relevant law is the Consumer Contracts Regulations, which give the consumer the right to cancel an order within the first fourteen days from receipt, or in the case where they have not been advised of the right to cancel, one year and fourteen days. The cost of return would normally be covered by the customer, unless they have not been advised of this during contract formation, in which case the retailer must cover the cost.

There is an exception to the above in the case of bespoke goods, whether the item would fall into this category is not clear - I can elaborate if need be. Even if it did, the right to cancellation is only excluded when you advise the customer in a durable form beforehand, which has not happened.

In summary, you must accept the return and you need to cover the cost of the return. You must provide a full refund within fourteen says.

Expensive lesson.

Bombardier25966 Thanks, yes please elaborate. The order was placed before 2015. Will that matter?

Looks like you and prh47bridge have different views.

Unfortunately ph47bridge has not told us what law she is relying on in her assertions.

The right of cancellation came into force in June 2014. Was it before that?

Your lack of written agreement means it would be for a court to decide when the contract was formed. Where there is ambiguity, courts generally err towards the consumer to reflect the imbalance in power between parties. In this case the consumer could argue that the contract was not formed until delivery (not unusual at all), and their assertion would be supported by your partner offering her the opportunity to cancel, they seem to agree that they were not bound to complete at that point. The court will also take into account the excessive delay, again erring towards the customer as they have had a lengthy delay.

On the point of whether the goods are bespoke or not, we'd need to know what the item is to be sure. But in the example you gave, If it was cars it would things like an extra sunroof, or metallic paint or more wheels, that would not be exempt.

If you give a customer a list of options and they select from that list, it would not be an exempt item.

If the customer asks for a sunroof that is 5cm longer than the one on the list and would need to be specially manufactured, that would be an exempt item.

Many thanks Bombardier. Definitely bespoke as thing like this hasn't been made in the same way.
Initial deposit was probably received before June 2014 but I will check.
We will refund as DH feels so bad about the delay but hope the customer will let us sell I first.

What I want to gain from this whole debacle is knowledge we can use going forward.
Should we contact a solicitor for a business pro forma of terms? Any idea of cost?

I really appreciate everyone chipping in. Thanks again

She?

I am relying on the current law as I always do in my posts. In this case that is The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, specifically part 3. This is clear that the right to cancel and receive a refund does not apply to the supply of goods that are made to the customer's specifications or are clearly personalised (regulation 28(1)(b)).

However, as Bombardier says, you are required to give certain information to the consumer on a "durable medium" such as paper or email. If you have not done so they can cancel even if the item is bespoke.

Thanks again @prh47bridge

On our invoices we have ' deposits are non refundable and complete dates are approximate'
We need something a bit more professional I suspect.

Sounds like a long bow. Really tricky but it isn't your husband's fault the client had the accident. Is it possible to sell the item? I think you should keep any deposit paid.