Contractor wants a big deposit

[Brendan Burgess]

A friend of mine is commissioning some plant from an Irish company which will cost around €80k. The Irish company wants a deposit of around €20k.

I checked the accounts of the Irish company and I have strongly recommended against paying any deposit to them as they are in a precarious financial position.

The Irish company is importing a piece of plant from Germany which will cost around €20k and the German company will not send it over until they are paid.

I have suggested that the customer pays the German company directly for the plant. So if the Irish company goes bust, at least the customer will own the equipment and be able to get a different contractor to commission it.

I have also suggested that the customer will pay money to a solicitor which would be released on delivery of the equipment.

This problem must arise all the time. If I was the Irish company, I would put some sort of mechanism in place to protect customers' deposits. But the Irish company doesn't seem to have any ideas other than "pay us the deposit - sure it will be grand"

 

[GDUFFY]

Maybe your familiar with this already.Might be a solution.

Escrow
What is this word Escrow?

The word ‘Escrow’ means neutral; to place money into the hands of a neutral third party in a transaction.


National Escrow Company
Box 219,
19 Glebe Lane, Killarney, Co. Kerry
Tel:0818333315 Email:[email protected]

FROM: [broken link removed]

 

[Setanta12]

What's the practice in that industry ?

(I was amazed to hear that until very recently - in a middle of a rant by yours-truly against foreign anachronistic practices - that importers here used to have to physically carry cash/cheques etc to bonded-warehouses before goods would be released - my point is; if its the industry-norm... then Don't Blame The Player; Blame The Game !)

 

[Brendan Burgess]

Maybe your familiar with this already.Might be a solution.

National Escrow Company
Box 219,
19 Glebe Lane, Killarney, Co. Kerry
Tel:0818333315 Email:[email protected]

FROM: [broken link removed]

Hi G

Very helpful. I was familiar with the concept of escrow, but I had not known that there was a specialist company. I will let him know.

Although I hate websites which give no indication at all about fees.

Brendan

 

[dub_nerd]

A friend of mine is commissioning some plant from an Irish company which will cost around €80k. The Irish company wants a deposit of around €20k.

A friend of mine paid about €10k (lent by me as it happens) deposit on materials worth about €50k. The supplier went bust within days afterwards and never returned the money. That was before the current recession. Nowadays I'd just laugh at the suggestion that a deposit of that size should be paid. If the supplier is too dodgy to get the goods on credit themselves, why should they think their customer would advance it to them? When I bought a €20k car a couple of years ago I told the dealer the deposit would be no more than €100 and they could take it or leave it. As it happens, I got my car, but the dealer did go bust a few months later. I would never ever pay a substantial deposit for anything again -- I'd prefer to go without.