Took the $40K Deposit, Never Shipped, Never Refunded — Court Ordered Return + All Legal Costs

Background

A U.S. company imported a batch of clothing from a Hangzhou-based Chinese company. In June 2023, the Chinese company issued a Proforma Invoice specifying styles, quantity, price, delivery, and payment terms — with a 30% deposit and a delivery date of September 20, 2023.

Transaction and performance

On July 10, the U.S. company paid a 10% deposit and sent the remittance proof for confirmation. The Chinese company acknowledged receipt the next day, stated it would process the order promptly, and raised no objection to the deposit percentage; subsequent communications likewise never mentioned it.

Dispute

The U.S. company repeatedly inquired about the shipment date and urged production. The Chinese company successively claimed it needed 60 days for production and demanded a higher unit price, consistently failing to ship as agreed.

In October 2023, the U.S. company issued a formal demand requiring a response within a specified timeframe — failing which the deposit was to be returned. The Chinese company did not respond.

Outcome

The U.S. company retained SuitWin Recovery. Following proceedings at the Yuhang District Court in Hangzhou, the court ruled that the Chinese company was to return the $40,000 deposit with interest, and to compensate losses including attorney fees, notarization and certification costs, and translation expenses.