Questions & Answers
Claiming security cheques from client for breach of contract
How can we get our security cheques back given to our client against an advance for an order?
Later, the LPO was cancelled after 170 days and we had already started the work for the job.
We have offered to give a non-transferable credit note to the client but the client is asking us to deposit an advance given to us against the LPO in the bank account of the client and holding our undated security cheques too.
The client has breached the contract by cancelling the LPO after 170 days while a part of the job drawings, structural calculations and other work were done.
Please advise how can we get our cheques back.

Hi there,
This is a sensitive issue and you must take your actions with all precautions. You can request him in writing, serve him a legal notice or even file a complaint about the same.
Thanks,
Sudhanshu Singh
As the client breaches the terms of the contract it is best for you to initiate the work of correspondence that proves the breach of the client to the contract and make a complaint guaranteeing your right.
This situation needs you to take action, so do not be late to do that.
For more help contact us.

Dear Questioner,
From the above description, I understand that your client had submitted a formal order for the purchase of some items.
You had furnished a security cheque against the order confirmation. However, they cancelled the LPO after 170 days of the issue which is against the terms and conditions mentioned in LPO itself.
In the meantime, you had already started preparation for the work which had actually costed a certain sum. Now, your client is not ready to return the PDC.
Before advising you on this matter I would like to clarify the following:-
1. Whether there was any agreement between you and your client regarding this transaction?
2. Whether an invoice was raised at any point of this transaction?
3. Whether there are any mail communications with regard to the advance payment and commencement of the work such as job drawings, and structural calculations and other work?
Kindly answer the above, so that I can advise you correctly.
Thank you.
Regards,
Rajasree Ravivarma