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Harmandeep (Director)     21 June 2011

Foreign trade problem urgent help required


We got order for some goods to export to a north east country through a commission agent, payments mode set to 30 % advance and 70 % t/t against shipping documents. Buyer mentioned his company name in the contract, but at the time of 30 % funds transfer he used his personal account. we asked buyer that why does he used his personal account for advance payment cause he is having contract in company name, he said that he done it as mistake but the remaining payment will get transfer through company account only. we agreed to their promise and started arranging goods from the market for shipment. just before shipment a third party called us that buyer is not having even a company bank account in the bank, so it can cause problem to us as after shipment we need to send shipping papers to the said bank for balance amount transfer but if there is no bank account of the company mentioned in the contract then how could we get our payment. After receiving this information, for verification we asked buyer for a 6 months statement of the company bank account but they failed to provide any document and finally they confessed that they are not having a company bank account. they stated many excuses for this, but we cancelled the deal immediately. we asked for there intention to provide false information in the contract but they didn't provide any satisfactory answer. Now they are threatening us for complete advance payment refund, we said that we made payments related to the deal, so how can we refund full payment but still we want to reolve the issue we are agreed to refund but less the expenses made.. as it was not our fault but they are still threatning for full payment, please suggest us how and where we need to complaint against them and what to do next to save our self.  You are requested to please help and update us with legal information, thank you in advance.


 3 Replies

piyush sharma (Lawyer)     21 June 2011

The conduct of the buyer is amounting to fraud and misrepresentation u/s 17 and 18 fo indian contact act and therefore voidable u/s 19 of same act. You are right in terminating the contract.

However advance payment taken by you must be returned back after substracting expenses incured by you.

It the threatening is of criminal nature then FIR could be filed against the buyer.

I also suggest you to sent a letter terminating the contract because of fraud and misrepresentation if you have not done this yet.

1 Like

Harmandeep (Director)     23 June 2011

Sir, Thank you for your kind feedback, we have already sent them an email a long time ago, stating that contract is terminated because of their mispresentation and breach in contract, but they are still pushing me for full refund. Sir, in case of fir, should i go to local police or any other authority? Sir, i have all the evidences to present my part, should i complaint in dgft also? Thanks again for your precious time. 

Rajiv (Senior Consultant)     06 July 2011

hi Harmandeep,

few questions to help you better.

1) what is the merchandise about

2) who is threatening you - the agent in India or the foreign buyer

3) do the documents establish that your contract had anything to do with the person who has advanced 30 percent.

4) are there documentary evidences with you to support your communication with the bank and the buyer subsequently about the fraud

5) why do you want to involve dgft ? what advantage do YOU see  in doing so ?

6) how much are you claiming as expenses ? how much percentage of 30 percent you have.

7) have you taken steps to file a complaint to black list this buying authority as well as the buyer ? what would stop you from taking this step ?





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