Non-refundable deposit may be enforceable
By Richard Alderman
Q: If I cancel a retail purchase, in this case furniture, within the 72-hour cancellation period, does the store have the right to keep my deposit? The contract does state that the customer shall forfeit the deposit to the store.
A: First, unless a store expressly gave you three days to cancel, you generally do not have any time to change your mind and get out of the contract. As a general rule once you sign the contract you are bound. There is a time period to cancel in only very limited cases. For example, you have three days to rescind a contract with a health spa, or in a door-to-door sale, or with a contract that puts a lien on your home.
On the other hand, any contract may give you the right to change your mind and cancel, even if law does not require it. Based on what you say, it sounds like the furniture store expressly gave you three days to cancel the contract, which you did. Whether you get back the deposit, however, depends on the terms of the contract and the amount of the deposit.
As a legal matter, there is nothing unlawful about requiring a nonrefundable deposit. If the contract states the store keeps the deposit if you cancel, my opinion is that the store may retain the deposit, unless the deposit was unreasonable. Under the law, a contract may provide for the forfeiture of a deposit, as compensation for the loss the seller may have suffered by your cancellation. But to be enforceable, the non-refundable deposit must be “reasonable.” For example, as far as I am concerned, the store could keep a 10% deposit to compensate it for the time spent on your transaction and the possibility of losing a sale. But a much larger deposit, say 50%, would probably be considered a penalty rather than compensation and not enforceable.
Q: I was recently contacted by a debt collector concerning a ten year-old credit card debt. Isn’t there some time period after which they can no longer try to collect?
A: This has become a very common question. It seems that more and more collection agencies are trying to collect very old debts. Under the law, there are time periods within which a lawsuit must be brought. If you delay beyond this period, the suit may be dismissed as time-barred. In most cases, a lawsuit for a credit card debt must be brought within four years of when you defaulted. Obviously, it has been much longer than that. This means that if the debt collector filed a lawsuit, you could have it dismissed. It does not mean, however, that the collector may not contact you to ask that you pay.
Even though the company may no longer sue, you still owe the money. Until the debt is paid, the creditor or debt collector may try to collect. In my opinion, as long as the company does not harass, threaten, or abuse you, it may request that you pay a time-barred obligation. Under federal law, however, you may stop all contact by sending a letter demanding it stop all future communication. That should end the matter. Look at the debt collection on my website listed below.
Q. I am an hourly employee. I always put in eight hours a day and do my job well. Now my employer says he expects us to work overtime as well. Can I be fired for not working over-time?
A. As far as the law is concerned, you may be fired if you refused to work when your employer requested. Basically, an employer may set the hours employees work. An employer may require you to work more than forty hours a week. All that the law requires is that you be paid overtime for any hours in excess of forty.
Do you want to know more about your legal rights? Check out my website, www.peopleslawyer.net.