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Ask Irwin Law Your Own Question
Irwin Law
Irwin Law, Attorney
Category: Legal
Satisfied Customers: 6855
Experience:  Lawyer & Real Estate Broker, 30+ years, foreclosure, land contracts, inheritance, probate.
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I own a storage and fulfillment and sales and marketing

Customer Question

Hello
JA: Hello. How can we be of help?
Customer: I own a storage and fulfillment and sales and marketing business My only customer has not paid me my commission since 2015 It is legal to hold the inventory that I have on consignment till they pay
JA: What state are you in? It matters because laws vary by location.
Customer: Ontario, CA
JA: Has anything been filed or reported?
Customer: no
JA: Anything else you want the lawyer to know before I connect you?
Customer: That's pretty much it
Submitted: 2 months ago.
Category: Legal
Expert:  Phillips Esq. replied 2 months ago.

Hello: This is Phillipsesq. Welcome to JustAnswer! I am reviewing your post, and I will post my response very shortly. Thank you for your patience.

Expert:  Phillips Esq. replied 2 months ago.

What does your contract say about default?

Customer: replied 2 months ago.
They keep saying they are going look it over, but never do. I know they have money, I can visually see they are spending money on marketing via WeChat messenger
Customer: replied 2 months ago.
I can't spend much more money, they have not paid me so I am using the last of my funds sparingly. If you can help then I can assure you we will have a winning litigation. I have a signed agreement.
Expert:  Phillips Esq. replied 2 months ago.

Thank you for the information.

Kindly note that this site does not offer legal representation. Attorneys on the site only answer questions asked.

I would need additional information in order to answer your question.

What does your signed agreement say about your recourse in case they fail to pay you? I will need to know what the default clause says in order to assist you.

Thank you for your cooperation.

Customer: replied 2 months ago.
There is no default specified in the agreement.
Expert:  Phillips Esq. replied 2 months ago.

Thank you for the information. However, I will opt out and give another Attorney the opportunity to further assist you.

Expert:  Irwin Law replied 2 months ago.

Hello. Another expert here. HOw can we be of assistance?

Customer: replied 2 months ago.
My question is may hold inventory for unpaid invoices
Customer: replied 2 months ago.
Sorry rephrase. May I hold inventory for unpaid invoice in the state of California
Expert:  Irwin Law replied 2 months ago.

You have not provided many details about how your business operates with this particular customer. In other words, exactly what do you do for that customer and how do they pay you for it? How is the consignment supposed to work? What is your agreement with them regarding their inventory and the cash flow from sales?

Customer: replied 2 months ago.
I have a company that store and fulfills orders. I receive email from a company A, create a shipping label, pick the items, pack the items, and drive to FedEx to ship. I also do sales and marketing as an independent representative on Amazon for customers like company A. Sales and marketing is selling the items listed in Agreement and Marketing which is additional exposure for items listed in Agreement. They have paid the amount storage and fulfillment, but not sales and marketing commission.
Customer: replied 2 months ago.
Company A pays for storage and fulfillment with an American Express, as for the sales and marketing side, they have failed to pay any at all. In regards ***** ***** consignment part, I receive inventory via air shipment from China, and store in my warehouse, and ship out order from my and there accounts. I listed below the actual part of my agreement for sales and marketing:
A: manufacture shall pay representative 8% commission of the payment received on all sales of products within the territory. Commissions should be deemed earned upon receipt of payment from the customer by manufacture.
B: All orders for product(s), which are accepted by manufacture shall be billed
Customer: replied 2 months ago.
shipped directly to customer. Unless otherwise agreed by manufacture and representative in writing, the representative shall have no authority to make collections from customers.
Customer: replied 2 months ago.
C: Commission shall be computed on the net invoice price(i.e. the gross price less customary charges for such taxes, allowance, any adjustments chargeable to manufacture and freight) of the product as billed by the manufacture. Marketing Funds/Coop advertising deductions or payments are not to be deducted from commissionable and guaranteed sales.
D: Commissions earned upon shipments and invoiced by Manufacture during each month of the term of this agreement shall be computed and paid on the 10th day of the succeeding month to representative. Manufacture will furnish representative with a statement with each monthly remittance of commission, showing the total invoice price of all sales upon which such commission is based during the preceding month, including computations of credits and deductions in the representative's account and the net commission payable
Customer: replied 2 months ago.
Hope that helps
Expert:  Irwin Law replied 2 months ago.

From a strict legal standpoint, you have no right to seize your customers property in payment of past-due commissions. The law would look at it as a prejudgment attachment of property, and in order to do that the creditor must first file suit and request that the court attach property that is in possession of the creditor, which the creditor is fearful of losing control over. In such case, the creditor fears that if the property is returned to the debtor, there will be no money with which to satisfy the eventual judgment. Prejudgment attachment of assets is rare, but the remedy does exist.

I hope that I have provided excellent service and, if so, would love a 5 star rating. If not, please let me know how I can further assist you. There is no additional charge to you for rating me. A bonus is not required, but is always appreciated.

Thanks again for using JUST ANSWER.

Expert:  Irwin Law replied 2 months ago.

Hello again. I hope that I have provided excellent service and, if so, would love a 5 star rating. If not, please let me know how I can further assist you. There is no additional charge to you for rating me. A bonus is not required, but is always appreciated.

Thanks again for using JUST ANSWER.