Consumer Law, Warranties How to deal debt of failing business

[cc112]

I am a small business owner that orders inventory 6 months in advance. My business is down 30+ % and am struggling to stay afloat. I have inventory starting to come in that I cannot pay for. I have sent letters to all vendors notifying them of the situation. What are my legal obligations if I refuse merchandise? Some of them have stipulations stating I will owe 30% if I do not take products. Am I obligated to those terms if I have not signed anything? Also, if I have signed something in agreement to the 30% how do I deal with that if I don't have the funds? The business is now on the market and my debt is growing, any advice would be greatly appreciated.
I also have a 3 year lease remaining.

 

[Michael Wechsler]

Without seeing any agreements, it's impossible to say for sure what your situation might be. If there is no agreement then it is possible that custom may dictate the terms although this is debatable. For the most part, I'm sure these companies will agree to some concessions if they know their choice is getting nothing. My thoughts are to start negotiating now and send out letters via a certifiable method informing them not to send merchandise in order to mitigate any costs/damages that may be incurred as a result of sending the inventory to you. By mitigating damages, you can make arguments and more effective negotiation later. Best of luck to you.