Can a cancellation fee be disputed if no service or product was received?

UPDATED: Oct 1, 2022

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Can a cancellation fee be disputed if no service or product was received?

Signed a contract and paid a deposit
for 10 bounce houses. The order would
NOT be processed until we paid in full.
We are not able to complete the order
so we canceled it within the required
time requirements. They are charging us
a cancellation fee of approx. 2,100.
Can we despite this charge?

Asked on March 6, 2018 under Business Law, Pennsylvania


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

You say you "cancelled it within the required time requirements": if the agreement or contract specified that you could cancel and get your money back within a certain time frame and you complied, they have to return you money, and may only charge any fees or keep any amounts allowed by the contract. (I.e. if the agreement said that even if you cancel in time they could get a restocking fee or cancellation fee, or keep the deposit.) If they charge you more than the contract allows, you could refuse to pay, or if they have kept the money from your deposit, you could sue them for its return.
Bear in mind that you can *only* get a full refund if the agreement says you can: if there is no "cancel with full refund provision," they could keep the deposit: the seller may keep deposits when the buyer does not go through with the purchase, unless there is a provision or agreement to the contrary.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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