Business deal gone bad.

[ZPowers]

I own an LLC and my business sold a large piece of equipment to another business for $20K. A sales contract was drawn up that stated the equipment was to be moved by a specified date. A deposit of half the sale price was accepted and the balance stated to be due at the time the equipment was picked up. The buyer failed to remove the equipment by this deadline. 5 months passed and the buyer still was unable to pickup the equipment after many attempts to get them to do so. At this point another buyer was found and the equipment was sold. I received a phone call from local law enforcement and was told that I will be charged with criminal theft of the original deposit if I dont pay it back. The sales contract did not specify if the deposit was refundable or not.

Adding to this, the sole reason for selling this equipment was to terminate the lease of the building the business was within and trim down to a home-based operation. The business took on 5 additional months of expenses for leasing the property until another buyer was found and the equipment was picked up. The business was on a month to month lease so we were not obligated to stay. These expenses exceed the original deposit by about 25% and created untold losses through indirect consequences.

I am surprised to hear that this can in any way be considered criminal. Nothing more has come of it as of two weeks since speaking with the local PD's detective. The original buyer is uncooperative in trying to find an amicable solution and is demanding the deposit back in full.

Just wanting to know if I really am potentially in jeopardy for criminal charges or if this is purely a civil case?

 

[LdiJ]

I own an LLC and my business sold a large piece of equipment to another business for $20K. A sales contract was drawn up that stated the equipment was to be moved by a specified date. A deposit of half the sale price was accepted and the balance stated to be due at the time the equipment was picked up. The buyer failed to remove the equipment by this deadline. 5 months passed and the buyer still was unable to pickup the equipment after many attempts to get them to do so. At this point another buyer was found and the equipment was sold. I received a phone call from local law enforcement and was told that I will be charged with criminal theft of the original deposit if I dont pay it back. The sales contract did not specify if the deposit was refundable or not.

Adding to this, the sole reason for selling this equipment was to terminate the lease of the building the business was within and trim down to a home-based operation. The business took on 5 additional months of expenses for leasing the property until another buyer was found and the equipment was picked up. The business was on a month to month lease so we were not obligated to stay. These expenses exceed the original deposit by about 25% and created untold losses through indirect consequences.

I am surprised to hear that this can in any way be considered criminal. Nothing more has come of it as of two weeks since speaking with the local PD's detective. The original buyer is uncooperative in trying to find an amicable solution and is demanding the deposit back in full.

Just wanting to know if I really am potentially in jeopardy for criminal charges or if this is purely a civil case?

This seems like purely a civil matter to me. Its a contractual issue.

 

[LeeHarveyBlotto]

It's a civil matter. Bonus advice: don't talk about it with the police.

 

[Ohiogal]

I own an LLC and my business sold a large piece of equipment to another business for $20K. A sales contract was drawn up that stated the equipment was to be moved by a specified date. A deposit of half the sale price was accepted and the balance stated to be due at the time the equipment was picked up. The buyer failed to remove the equipment by this deadline. 5 months passed and the buyer still was unable to pickup the equipment after many attempts to get them to do so. At this point another buyer was found and the equipment was sold. I received a phone call from local law enforcement and was told that I will be charged with criminal theft of the original deposit if I dont pay it back. The sales contract did not specify if the deposit was refundable or not.

Adding to this, the sole reason for selling this equipment was to terminate the lease of the building the business was within and trim down to a home-based operation. The business took on 5 additional months of expenses for leasing the property until another buyer was found and the equipment was picked up. The business was on a month to month lease so we were not obligated to stay. These expenses exceed the original deposit by about 25% and created untold losses through indirect consequences.

I am surprised to hear that this can in any way be considered criminal. Nothing more has come of it as of two weeks since speaking with the local PD's detective. The original buyer is uncooperative in trying to find an amicable solution and is demanding the deposit back in full.

Just wanting to know if I really am potentially in jeopardy for criminal charges or if this is purely a civil case?

Who drew up the contract -- you or the other party?
And it is possible this COULD be a criminal issue.

 

[LeeHarveyBlotto]

Forgot to mention, any advice here only applies to the United States, and can vary greatly by state. Don't know if that's the case here, as you erased the "What is your state" prompt.

Also, Ohiogal is more correct than I was, that it's possible that it could be a criminal matter. It's also possible that they are making empty threats to get you to cave and in turn get your would-be customer out of their office. In addition to her question, I'd also ask what kind of equipment it is.

 

[RRevak]

Did you ever inform the original buyer that you were going to resell the equipment if they failed to follow through on their end or did you just resell without notice?

 

[ZPowers]

I'm in Florida.

The sales contract began with a generic template and then evolved for the purpose of this sale through email exchanges back and forth until we were both satisfied with it.

The buyer was given a verbal ultimatum at the time a new buyer came into the picture at the ~5 month point after it was supposed to have been picked up - stating that I would continue to hold the equipment for him if half of the remaining balance were paid immediately and an agreement that the equipment would be moved within 30 days. The buyer agreed to have the equipment picked up within a month but refused to pay half of the remaining balance. The buyer was not notified that there was another buyer in the picture.

The equipment is an automotive chassis dynamometer. ~10,000 lbs total weight for the dynamometer and the 4-post lift that goes with it - appx 35' long, 10' wide, requires heavy-lift equipment to disassemble and transport.

 

[Ohiogal]

I'm in Florida.

The sales contract began with a generic template and then evolved for the purpose of this sale through email exchanges back and forth until we were both satisfied with it.

The buyer was given a verbal ultimatum at the time a new buyer came into the picture at the ~5 month point after it was supposed to have been picked up - stating that I would continue to hold the equipment for him if half of the remaining balance were paid immediately and an agreement that the equipment would be moved within 30 days. The buyer agreed to have the equipment picked up within a month but refused to pay half of the remaining balance. The buyer was not notified that there was another buyer in the picture.

The equipment is an automotive chassis dynamometer. ~10,000 lbs total weight for the dynamometer and the 4-post lift that goes with it - appx 35' long, 10' wide, requires heavy-lift equipment to disassemble and transport.

Who had the template? Who made the changes? Was that you?

 

[ZPowers]

Who had the template? Who made the changes? Was that you?

The template was sourced by myself via the web and there is email record of the all of the communication between the buyer and myself that resulted in the modifications that were made to the contract to the satisfaction of both parties.

 

[Ohiogal]

The template was sourced by myself via the web and there is email record of the all of the communication between the buyer and myself that resulted in the modifications that were made to the contract to the satisfaction of both parties.

Ambiguities go against the drafter, i.e. YOU. Which means that since the contract does NOT state the deposit was nonrefundable YOU MUST RETURN IT. If this proceeds to court, you could find yourself paying a whole heck of a lot more than the 10k. And yes, YOU were the drafter because YOU were the one primarily responsible for the contract (i.e. sourcing it, making the changes, and what not). If you keep it due to your poorly worded contract that you drafted, it could result in theft issues.