Questions & Answers
What can our company do if the client cancelled the order and threatened to file a case for the cancellation fee?
Salaam Alekum
We had a client from the US who had an agreement with us for 19-20 big buses for 20 days of transport service in KSA. They cancelled 12 buses and then the entire order 2-3 days before the event.
They paid around 25% of the total cost initially agreed on 50% before the event.
We have been keeping those buses on hold for more than 1 month, not taking other bookings, and facing losses.
My company is charging them 50% cancellation fees because of last-minute cancellation, but now the client is threatening us to take legal action and doing PR advisement by asking for the deposit they paid.
Our policy is refund will be issued within 45 days after internal investigation, but the client is threatening us again.
We don't give a refund if the cancellation is done by the client and mentioned on the invoice as well. In this case, we are considering a solution which takes time.
What can we do in this situation, as we have already faced lots of loss?
Wa Alaikum Assalam,
Thank you for sharing the details.
Since you have a clear cancellation policy stated on the invoice specifying no refund for client cancellations, you are within your rights to charge the 50% cancellation fee, especially given the last-minute nature of the cancellations and the losses you have incurred.
To handle the client’s threats and maintain professionalism, you may:
- Reiterate the agreed terms in writing, highlighting the cancellation policy and the deposit already paid.
- Explain that the refund process (if any) follows your internal investigation and timelines, which is standard procedure.
- Offer to keep communication transparent and consider a possible goodwill gesture if you believe it can help preserve the client relationship, but do not waive your rights under the agreement lightly.
- If threats escalate, consult a legal advisor to understand your position and how to protect your company legally.
Maintaining clear documentation and communication is key. Standing firm on your policy while showing willingness to resolve amicably is the best approach.
Wa Alaikum Assalam,
Thank you for reaching out. Based on your message, your company appears to have a clear cancellation policy that was communicated to the client and reflected in the invoice.
If the client canceled last minute and you suffered actual losses due to blocked resources, you may have a legal right to retain part or all of the deposit—especially if this was outlined in the agreement or terms.
However, since the client is threatening legal action and engaging in negative publicity, it is crucial to respond strategically and with legal support.
We recommend booking a consultation with Future Vision for Advocacy and Legal Consultancy to review your agreement, assess your legal standing, and help you prepare a proper response or defense.
If needed, we can also represent you in any legal proceedings or negotiations.
Book your consultation today through our website.
We are happy at Future Vision Law Advocates and Legal Consultancy to assist you and provide the best legal services that meet your needs.
To contact us, you can call or WhatsApp us.
Wa Aleykum Assalam,
Thank you for reaching out.
Based on the situation you’ve described, if the cancellation terms (including the non-refundable deposit and cancellation charges) are clearly stated in the signed agreement and invoice, and the client canceled at the last minute, you are legally entitled to enforce those terms, especially if you reserved the buses and incurred losses due to their cancellation.
Here is what you can consider doing:
Document Everything: Ensure you have copies of the agreement, invoice, proof of reservation, communication with the client, and any loss or missed business due to their cancellation.
Respond Professionally: If the client is threatening legal action or defaming your business online, reply in writing, maintaining a professional tone, reaffirming the terms agreed upon and your refund timeline (e.g., 45 days after investigation).
Offer a Middle Ground: If you want to maintain goodwill, you can consider offering a partial refund or credit note — but only if this does not harm your business further.
Legal Protection: If the client proceeds with a legal complaint (especially from outside the UAE/KSA), you have the right to respond formally through your legal counsel, using the signed agreement as your defense.
Defamation & False Claims: If their PR activities involve defamation or false allegations that damage your reputation, you can take legal action for damages under UAE Cybercrime Law or KSA equivalent, depending on where the publication occurred.
If needed, we can assist you in drafting a formal legal response to the client, reviewing the agreement, or taking further steps.
Feel free to contact us directly for a consultation.
Best regards,
Mohammed Salah
Legal Consultant
You can wait until the case is filed and then submit a comprehensive defense memorandum (counterclaim).
For inquiries, contact us by phone.
1. Review of the Contract with the Client:
We must verify the provisions related to cancellation and applicable fees, and confirm whether they were duly agreed upon and signed by the client.
If there is a clear and explicit clause stipulating a 50% cancellation fee for last-minute cancellations, this would provide you with a strong legal position to rely on in case of any claims.
2. Official Response to the Client:
We can prepare a formal and courteous legal response that includes the following points:
Confirmation that you committed to providing and reserving the buses exclusively for the client based on the agreement.
Clarification that you incurred actual losses as a result of blocking the buses and refraining from renting them to other clients.
Emphasis that the cancellation policy was clearly agreed upon and that it stipulates a specific cancellation fee in the event of a last-minute cancellation.
Expression of your willingness to discuss amicable solutions, while making it clear that you are not legally obligated to refund the amount, in accordance with the agreed terms.
To resolve the dispute with the US client who cancelled the bus transport service, review the agreement and contract terms, respond to the client's threats, and reiterate your company's cancellation policy.
Consider negotiating a settlement or offering a compromise, and document everything. If necessary, seek mediation to resolve the dispute. Prioritize professionalism and calm communication to minimize losses for your business.
Dear questioner
Review the agreement regarding the jurisdiction clause, whether KSA or USA, or Arbitration referred.
Also need to review other concerning terms like force majeure clauses as well.
If you need our assistance in reviewing the same, kindly share your WhatsApp number.
Dear Inquirer,
We are pleased to assist you with your concerns.
Given the commercial nature of the agreement and the international elements involved, your situation may require a detailed legal review of the contract terms, cancellation clauses, and jurisdiction rights.
There could be legal grounds to protect your company and address the client’s threats appropriately.
We recommend scheduling a consultation to assess the documents and advise on the best legal approach.
Please contact us for a complimentary 15-minute online consultation to discuss your case in detail.
NJA | Jasim Al Haddad Advocates & Legal Consultants
Since the transaction took place in Saudi Arabia, the legal action will be considered under the jurisdiction of Saudi courts.
If the contract clearly outlines the cancellation policy and specifies cancellation fees, the client is obligated to adhere to these terms.
However, if the client threatens legal action, you can file a complaint in the commercial court to resolve the dispute.
It’s important to have evidence of the cancellation policy and the agreed terms, but you can also consider negotiating a settlement.
Our office specializes in contract and commercial disputes and can assist you in resolving legal matters. Feel free to contact us via WhatsApp for quick and accurate legal advice.
Alsalm alikom,
Greetings,
In order to provide you with accurate and proper legal advice, it is necessary to review a copy of the contract and its terms in detail.
Please send the contract to the email address below and contact us via the phone number provided.
Kindly note that our fee for reviewing the contract, including examining all clauses and providing a legal opinion, is AED 2,000.
We look forward to your prompt communication, and thank you for your understanding.
Best regards,
A. Alya Alzeera
Legal Consultant & Lawyer
Licensed in UAE and Bahrain
