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Dave Kennett
Dave Kennett, Attorney
Category: Business Law
Satisfied Customers: 27689
Experience:  25 years practicing law
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A company put us on C.O.D. terms. They delivered all of our

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A company put us on C.O.D. terms. They delivered all of our goods without collecting payment. Signatures are on the paperwork and we have the goods. Now the company is coming to us two months later to collect. We previously had credit terms with this company but this invoice was marked COD. They have no auto payment method on file. Would we be responsible legally for these goods or what are the legalities on a C.O.D. shipment that was been delivered that the shipper left without taking payment?
-Could you explain your situation a little more?
Are you asking if you can simply keep the merchandise and not pay or whether you can return it since it was never paid for?
Customer: replied 4 years ago.

We had an employee on staff the day the merchandise arrived and had him give payment to the driver that dropped off the merchandise. However, the company is stating that payment was never received and we have no records of the transaction so we really have no proof it was paid.


 


With that being said, since we cannot prove it was paid but the company left the merchandise with us with us via C.O.D. terms, would we be entitled to keep the merchandise and not pay and are there legal ramifications to make us pay?

Dear JACUSTOMER - You could be sued for the amount due under the theory of "unjust enrichment". Obviously if your employee paid for the merchandise and you want to defend on that basis you can do so but you can't just keep the merchandise and not pay because of a deliver mistake of not collecting the COD money. There simply is no legal basis to be able to get something for free because of a clerical or other error on the part of a delivery person. Since the goods were never paid for you would have a right to return the merchandise if you wish but if you keep it you must pay for it. I'm not certain why there wouldn't be a receipt or a canceled check if your employee paid for the items when they arrived but if payment was made you can deny you owe the money and defend any suit on the basis that the bill was paid.
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