On 2006-11-25 10:28:19 +0000, "Brian Sharrock" said:


"Dave Plowman (News)" wrote in message
...
In article . com,
wrote:
A company I want to use to supply a set of windows for my new home (we
will install them) wants 50% deposit with the order. Is this excessive
(and risky) for normal purchases of this type?
The other 50% is payable on delivery

Forget that. I'd not pay the rest until after installation - and want a
buffer period to make sure there are no snags.

As regards a deposit, what safeguards are there against that deposit being
lost if the company goes broke?


It all depends on who you are contracting with.

IF 'the company' is entitled $Something 'Ltd'; - that's a 'WARNING'
that the company's total liability is _limited_. Check Company's House
for the limit of their total liability.
If it's a partnership there's no limit to their liability - but presume
that 'efry fings in the wife's name sniff'.

Giving a deposit places you at risk .... effectively you're an
_unsecured creditor_ and if 'the company folds you join the queue to
pick over the bones .... after HMRC ( nee Inland Revenue), National
Insurance; ..... then you.

That's tough , that's life !

This is why it's important to use a credit card or something else
governed by the Consumer Credit Act. The issuer becomes jointly
liable even if the supplier goes broke. In tht sense, it doesn't
matter whether the supplier is a limited company, partnership or sole
trader.

In terms of deposits, I think that it does depend on the nature of the
product as well.

If the items are completely standard and not made specially to size
(i.e. would be usable elsewhere), then I think it's reasonable to
strike a harder bargain with the supplier in terms of deposit - perhaps
10% on order, a further 20% on delivery and the rest on *satisfactory*
completion.

If they are custom, then I think that it's reasonable for the supplier
to expect a larger proportion of the cost on order or on delivery -
perhaps 50% cumulatively at point of delivery.

In neither case would I go for a situation of having less than 50%
outstanding before completion.

The other thing is to agree the price *before* the payment terms.
Otherwise, if you push for a larger proportion on the back end, the
price may end up being higher. The supplier may be factoring the
payment schedule into his cash flow. Since there is a cost
associated with payment terms, that may affect the price and it could
be higher if he has to fund more of the cash flow. This doesn't
necessarily indicate financial difficulties on the part of the supplier
but could do if he is very insistant on it.