Still liable for money-back guarantee if company closes?

Discussion in 'Growing and Managing a Business' started by Derek59, Oct 24, 2010.

  1. Derek59

    Derek59
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    If my company sells a product with a money back guarantee and my company closes, can the company still be liable in any way for all those refunds (if customers do choose to return products & request refund)?
     
  2. Kay

    Kay
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    Good question. I think before anyone answers we'd need to know what country's laws the business comes under, Derek. Can you tell us where it's located please? I honestly don't know but would try help you find out if I knew where it was.
     
  3. EvanP

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    Hello Derek59, welcome to Business Advice Forum.

    There was recently an issue here in the UK where customers of a well known high street brand shop called Woolworths were debating whether a refund for items should be issued to them after the company went bust. In the end, the outcome was that the creditors managing the business would have the final decision on whether refunds were made. So, assuming that you are under the laws of the United Kingdom, I think the same thing would apply for you. :)
     
  4. Derek59

    Derek59
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    Thanks guys - we are situated over in NZ - and as part of our course, we are suppose to be taking some laws in NZ and stacking them against laws in different parts of the world and see if they are the same/differ - and perhaps the reasons why behind them.

    It sounds like UK laws are very similar to NZ - which is to no surprise since we are under the British commonwealth :)

    Thanks for your replies :)
     
  5. Kay

    Kay
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    Derek59, I've read a few pages and it looks like when a company's liquidated, a court appointed Official Assignee takes over all the dealings with creditors or anyone else who has any kind of monetary claim against the company eg unpaid employees. I would think that would include those looking for refunds but you'll need to confirm that. My thinking is that they would come under "unsecured creditors" and unfortunately for them, if so they are last in line to get paid.

    This Source page may be of more help to you. http://www.business.govt.nz/exiting/dealing-with-becoming-insolvent/company-liquidation-faq
     

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