Do I have to refund a client’s deposit from 5 1/2 years ago.

UPDATED: Sep 30, 2022

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Do I have to refund a client’s deposit from 5 1/2 years ago.

In Aug, 2010, a client asked us to design and build her a kitchen and numerous other cabinets, and gave us a 5k deposit.. We spent 5 hours going over the details, then approx. 30 hrs. hand drawing everything. When we went to her house to present the plans, she informed us she changed her mind, and had a new concept, and threw the plans in the trash. She informed us that she wanted all of the cabinetry to look like animals. Cats Feet, horse heads, etc. She went on for a long while, and we left as soon as politely possible, concluding that she was a bit off. Now, 5 1/2 years later, she wants a full refund, and has sued us in small claims court. Isn’t there a statute of limitations? Our original invoice said our time was 75 hr, and we offered to give her a breakdown of time, and she rejected it, demanding full pmt. Where do I stand. I’m in California.

Asked on March 16, 2016 under Business Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

There is a statute of limitations, and for a written contract (the cause of action this would almost certianly fall under), it is only 4 years--the action grows out of the agreement (or contract) between you and her regarding the work and payment therefore. Since it's only 4 years,  if the alleged breach--when you stopped work--occured more than 4 years ago, you should have a good defense based on the SOL, which you can raise in court or by way of answer or motion , if small claims court in your state permits answers or motions (some small claims courts do not--you simply show up on the trial date and raise your defenses then). Bring documention showing when the contract was entered into, when you worked with her, how much time has passed, etc.
(Note: if there was no written agreement, only an oral one, the SOL is shorter: two years.)

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