Where do I stand? Can I get my money back?

[Stripypopsicle]

I paid someone for a service earlier this year via business payment on PayPal.

Due to delays in the project it had only just started and then due to unforeseen circumstances we’ve had to cancel the project all together.

They say they haven’t got the money to pay me back and that they can offer the service I originally paid them for. Their service is no longer required and the project is cancelled.

Is the money rightfully theirs now or can I request a refund? (They know the project is cancelled but have said they can’t afford to refund me).

Which side caused the delay?

What is the project and what caused the delays?

Delays were my fault as their part would have come at the end of the project and they couldn’t do their part till I’d done mine.

They knew the project wasn’t ready to move forwards but asked for advance payment as they needed the money.

If they are providing a service why did they need money up front?

Unless you have a written agreement that lets you cancel their services without penalty I don’t see why the other business would owe you anything.

You can ask PayPal to refund on the grounds of non-provision of service. But they can respond that you paid in advance for a non-refundable service. They may have turned down other work because you had booked them, for example, in which case they may legally be able to keep the payment.

but this will all depend on the actual contract that you signed, or the terms of any correspondence or conversations, or on the normal terms relating to this industry or kind of service.

nobody can give you a definitive answer based on the very scanty information you’ve provided here.

depends on the terms of the contract, but esp as it was a business not consumer contract, unlikely you can get money back.
they were willing to supply the service, you stalled, then tried to cancel.
doubt it's refundable.

Thanks all.

Not sure if this makes a difference, but there was no contract signed, it was more an informal arrangement via email and agreed a price for their services as part of the project.

Not refundable, you delayed, didn't keep up your end of the bargain so you lose your money. Cannot understand why you think you would be entitled to it.

In the absence of a signed contract, the emails set out the terms of your agreement.

The central question is whether they have suffered any loss as a result of your cancellation. Have they, for example, incurred any costs or lost any profit. If they have not, they must return the money you have paid. They cannot refuse a refund on the basis that they can't afford it. They can only keep it if they have suffered a loss. Even then, they must take reasonable steps to reduce their losses and must not keep any more than is necessary to cover their loss.

I would ask them what losses they have suffered as a result of you cancelling the service that justify them keeping your money.

Paypal have a 6 month window in which you can open a case for goods not received if you have paid by business payment. You need to open a case for item not received. The onus is then on the seller to prove they have either sent you an item or provided a service, normally this is by way of a tracking number. I would keep any communication regarding inability to pay as this does intimate intention to pay but unable to pay.

However, in the first instance, open a case and see what happens, if paypal agree you have paid and not had what you paid for, they will credit your account and then chase up the other party for repayment.

Did they need the money advance to make preparations do do their part of the project?

Why would you be entitled to a refund by default?
You agreed to buy a service, and now you’re the one calling it off - you’re not automatically entitled to a refund.
I’d try and reach an amicable agreement that benefits everyone, but a full refund is expecting far too much given the delays and cancellation are your choice.

I don’t think it’s fair to ask for a refund, it’s not their fault your project was delayed & is now cancelled.

If they’re still offering to complete the service their end but you don’t want/need it that’s not their fault.

Why would you be entitled to a refund by default?

Because that is the law.

In the absence of a contract setting out cancellation terms, the service provider is only entitled to keep any money needed to cover their losses. If they have bought any stock in preparation for the work or turned away other work to be available for this job, they can keep whatever is needed to cover those losses. However, if they have not incurred any loss, they are not entitled to keep OP's advance payment.