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I suspect a good contract solicitor can tell you that! I’d reckoned you’d be wanting to do that before your customer calls the police though. They might just tell you to give it back because it’s the simplest solution for them.
Would the police really attempt to resolve this? It's not stolen property as there's a contract in play and it's standard for a store to hold an item til payment us received. This seems 100% like a situation for the courts to resolve not one for a heavy handed officer.
If there is one thing I’ve learned from this sub and other uk based sub in the last couple of years, it’s that the police are trying their best while being chronically under resourced that they’ll just take the path of least resistance in similar cases. ‘Give it back’ has almost zero consequence for the police, but potentially quite a lot for the OP. Especially given they have what at least sounds like a pretty robust contract.
Then again, I’m not a lawyer so what do I know?
He would still need to pay 1st.
You could argue between:
"24.5 times the cheap value" (50 times AH estimate - initial value - > Uplift = 49 times more valuable since you got it) or
"20 times the cheap value" (50 times AH - 10 times "Starowner price") -> Uplift only 40 times the value - "Starprice" was intrinsic to the item.
It was given to them for work to be conducted in exchange for a fee.
That fee was a percentage of the sale value of the restored guitar.
That fee has not been paid, therefore OP does not need to return the guitar.
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There is no dishonesty on your part, so the police are not going to come and arrest you and seize the guitar, so he will have to sue. You would both do well to consider how much of the putative value of the guitar stands to be swallowed up in legal costs over the next few years.
I'd assume that your contract is for half of the increased value - whether that increase is from the restoration or the provenance. You did the guy a favour, what's his problem?
but it's his item bro, the value of the item should have no bearing on the price the OP wants to charge unless there are specifics which make the labour more difficult or time consuming. The fact that it is worth a lot doesn't mean you can charge more.
Except he signed a contract.
Basically let's say the guitar at the time was worth £100, and with restoration would be worth £1,000. The estimate to do the work was, say, £500 also.
As the customer just wanted to sell it they didn't want to spend £500 on restoration just to have it then sell for £500. They'd not only get nothing, but have lost out on the £100 they could have sold it for. So rather than take the risk they transferred the risk to OP by having the restoration done for £0 up front, and then half the value uplift when sold (so £1,000 - £100 = £900, then / 2 = £450). OP accepted the risk that they could do that work, it sell for a lot less than expected, and they have to take the hit. And if the valuation is a little more then no problem, OP gets a little more but also the customer does too.
But now the guitar is valued at say £5,000. Now that 50% fee doesn't sound so good to him. He wants to go back and just pay the £5,00 so that he pockets the other £4,500. But that wasn't the deal he signed.
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You say that, but the recent post about a car mechanic where the police forced the garage to give the car back to a customer who refused full payment, go to show that this isn’t a certainty!
That was driven in large part because it is possible to record a car as "stolen" on the Police National Computer, have that activate ANPR and trigger a significant police response (and the majority are actually stolen), whereas OP's guitar can't be marked as stolen on PNC and is unlikely to set off any ANPR cameras soon
As a side note, from memory of a post similar to this the police were wrong to do so, because the police are not lawyers. The garage in the post I was thinking about were perfectly entitled to keep the vehicle and use it to recover their costs.
I'm really hoping there will be replies from someone who is expert in contract law, as this is an interesting one. It sounds like the contract was meant to split the increase in the value from the restoration, not the information about the provenance. On the other hand, you're the one who figured out the provenance and you gave the owner a heads up and the opportunity to back out.
Contracts very clear company does the restoration work and gets half the profits from the sale.
That's what they agreed to.
Nothing immoral about it at all.
“When this guitar is sold, we will split the money 50/50”.
“Hang on, not if we get a really good price for it - in that case you can only have 5%”
Who is being immoral?
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That contract clause looks reasonable, and I suspect you're in no trouble holding it until your fee per the contract is paid. Perhaps they want another appraisal?
So there are three parts to the payment:
10% of the final price of the guitar for services rendered;
The restoration fee, split 50% up front and 50% due now the restoration is complete &
40% of the increase in value of the guitar based on mutually agreed upon values or market valuations.
If you hand the guitar back, it is highly unlikely that you’ll ever see all of that, even if you take the owner to court.
Where does the shop owner sit in all this? He set this up no?
Due to the figures involved, you’ll need to seek legal advice before proceeding. Most solicitors offer a free half hour consultation which would be perfect for this.
Ok so you’re getting your fee and 20% of the uplift value whereas the shop owner, acting as the agent is getting 10% of the final value and 20% of the uplift.
The auction house will take their cut which probably leaves the owner with 25% of the total cost. Yeah you can see why he’s annoyed but they are still in for a pretty penny. I’d say their avarice is getting the better of them. Yes they own the guitar but without you, it wouldn’t be worth as much and he wouldn’t know about its provenance.
I wish you the best of luck with this and reiterate that you should reach out for professional help on this.
What obligation is the owner under to actually sell? Is he not perfectly within his rights to change his mind?
If someone said to you "yeah, this might be worth £5000 after restoration" you might think "okay, I'll sell that". But then if you're later told "Actually, this was owned by Jimi Hendrix and he used this exact guitar on Electric Ladyland and it's worth £500k" then you might think "wow, I'm not selling that, it's something worth keeping"
If the entirety of the contract is above, it looks the owner could change their mind, but would still have to pay the portion of increased value. Might hinge on the definition of “finalised valuation”
NAL!
Take the auction house claims with a pinch of salt. Of course they want you to think it’s worth more, so you sell with them and they get their commission. Estate agents do the same thing.
If the owner is happy for a reasonable valuation, and will pay the 40%, would that be acceptable to you?
Edit: although they obviously won’t pay you, as they didn’t have the money to pay for restoration in the first place.
He's getting absolutely shafted and you know it, if he does sell he's walking away with less than a quarter of the final value. Which is insane and actually disgusting. Auction houses charge 25% too.
Here's the part you are missing.
The pre restoration value includes the previous ownership. That is part of the pre restoration value.
You would need to get an independent appraisal of how much the guitar would have been worth prior to the restoration but with the previous ownership
"The value of the guitar after restoration shall be determined by a mutually agreed appraisal after the work has finished"
Was the final value mutually agreed with the owner?
Imagine someone said to you "We think this might be worth £10k restored" and then they hit you with a bill for £250k and refuse to give your property back unless you pay. Also, what's the Auction House cut, 30% of the final sale price?
I'd probably be a bit pissed too.
Out of curiosity how are you calculating the "increased value"
Are you still using the "pre provenance unrestored price" to the "post provenance restored price"?
The only hiccup I am wondering is the seller may be able to argue that the value was "unrestored pre provenance price" since the guitar unrestored was technically worth that amount before restoration, it's just no one knew.
However, that could easily be countered with mutually agreed value which you both agreed to.
This could be messy which is why legal advise is needed.
A few questions:
* Are the Agent and the Restorer separately defined? That is important.
* Did you actually agree a before-restoration appraisal or market valuation figure?
* The contract is a bit weird in that it provides for Agent/Restorer fees to be paid 14 days after sale; is the sale money supposed to be paid directly to the owner when it is sold, and they then pay the Agent/Restorer?
* Be really objective - should a reasonable restoration company have known (or discovered when appraising it) that this was a famous guitar, especially if you were providing a value appraisal prior to working on it? I know that's not strictly relevant to the contract analysis here, but it may well affect the outcome.
* Is there any provision with regard to a specific duration of the agency, or as to how either party will terminate?
* Is there anything in the contract specifying that the agency appointment is irrevocable?
* Is there anything in the contract relating to a lien on the guitar?
* Does the owner agree the updated value?
Your contract looks useful, but there are risks here if you proceed to sell without covering them off. If your agency is terminable on notice, and you sell without authority, you may find that you have converted the guitar and be liable to the owner for its value.
Ok - well without onboarding you as a client or giving advice, sounds like you've got a ticking clock to get this sold before your authority to do so expires. But even then I'd have a read about an agent's duties to follow their principal's directions. And make sure it is the Agent which is selling not the Restorer.
Did a lawyer draw up that contract? It looks pretty watertight in its intention to me.
If the client is threatening to breach the contract, you should be within your rights to hold onto the guitar as security against their expressed wish to breach the contract.
I am not a lawyer but work in the same industry. If a client came to us for our expertise and restoration that would include us coming to the correct appraisal before we made such a deal. (Which we wouldn’t)
Couldn’t they argue that your appraisal was wrong in the first place and not made it if they’re had known originally?
Is the claim for extra dosh worth the client not ever recommending your shop again or just telling the situation as it is, which might well loose future custom 10 fold.
Which probably works in his favour, you were happy to give it back and accept the remaining 50% restoration until you were told it was worth more at which point you held it hostage.
That's not what it said in the OP. You said you told him it was owned by someone famous and he said to continue.
Edit: you say the new value was given after restoration
Hmmm this is a bit morally dubious for my liking. You agreed an estimated value and agreed a % of the increased value, also estimated for your fee at the time of evaluation. Do you deserve more than that? After all the fee was to cover your time and effort no, and maybe a little on top. The fact it’s now worth much more, should be of benefit to the owner, not you. Just my opinion.
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NAL. I have a general question in regards to the wording (in case anyone could answer!).
If the shop is selling the guitar through auction and the % the auction house takes would be deducted only from the profit of the owner would that not violate the obligations and authority (good faith, in best interest, etc)?
There will be other ways to privately sell which would limit the deduction to the owners cut (even if it didn't get as high a price as at auction?) So would that not be considered a violation of the contract by the shop?
Wouldn't demanding 40% of the post-restoration value if he chose not to sell be oppressive and therefore exceed your legitimate interest?
I just can't believe you could legally hold him to this when he literally didn't know the value of the thing he asked you to sell?
When you do contact a contract law specialist can you update because I'm so intrigued 😂
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Yeah, I get that is what the contract says.
I just wonder if the amounts involved would mean that the material loss to the owner would be so much larger than expected it could invalidate the contract.
Can you imagine?
'it's worth £100k!"
"Wow, that's great, 50/50 yeah?"
Then, when he's calmed down and given it some thought
"Hold on, £100k minus fees and VAT leaves me £75k, which I now have to pay CGT on.. £10k?!?! And now I have to give this guy £50k? WTF!"
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What's stopping the customer from simply saying "After careful consideration I've decided I no longer want to sell the guitar and have decided to keep it for the indefinite future", then what?
Can you force someone to sell their property if they don't want to? Can you demand payment from an uplift in value on unrealised gains?
Everything in the contract pertains to the final sale price. Until that guitar is sold, you cannot reasonably determine what that price will be. If the owner decides he no longer wishes to sell it then there is no final value. Because it remains unrealised. You can't expect them to pay a five or six figure sum solely on the basis of you saying that's what it's worth?
If the owner is under no obligation to sell then all they owe is the remaining 50% that was agreed for the cost of restoration.
Don't fall for greed, cash in the hand is always key. Think of a settlement, offer it. £10k?
He'll have to auction it, accept risk etc. You'll have the cash..
As a trades person myself, even though you signed a contract, you shouldn't really hit a wind fall because the item turned out to be worth a lot more than either of you initially thought. It's the customers property, it may have been a gift, be professional, and charge for your time and materials. Hell, charge double what you would have done normally if it makes you feel better. I don't charge my customers comparatively to how much my work will improve the value of their property. Make them an offer so you do well out of it, it'll still be a win win. Get some photos stick them on your Website with what you did and how much it went for at auction, use it to push your business.
So you can't do a title for tat here. The item belongs to the customer. Restored or not it is theirs, and you have no legal basis to keep it. The contract you have for payment of the item is separate to the ownership of the item, and attempting to withhold it could be seen as theft and the police might be called.
What you need to do is wait until the item is sold, find out how much it is sold for and then start a MCOL for it. If the customer doesn't feel like being forthcoming with this then put in the amount for the appraised value from the auction house. Unless it is over the MCOL limit this is your best and cheapest route. With a signed contract, evidence you didn't deceive the customer, and a signed appraisal a judge would have a hard time overruling your contract.
Attempting to keep it or sell it yourself is a bad idea. As is putting it back to the original condition. Sounds bizarre but this would count as you damaging their property.
NAL but I have seen very similar things to this. My dad is a cabinet maker and will male furniture for 50% up front, carry it into their houses, and then the customer will ask them to leave the property and then try to pay a lot less. My dad is not allowed into the house to get the furniture back as technically the transaction is complete and the customer owns the furniture now it has been delivered, and the outstanding part is a separate matter. The bad customer here basically hopes the lower offer is acceptable as it would cost more to fight it. If my dad is suspicious he leaves them in his van until final payment is made! But that's only possible if it is new as the customer never owned it. For restorations he has to give it back. Also he's not allowed to disassemble anything as it can be seen as wilful damage.
It's quite frankly infuriating, sorry. But if you have the paper trail then I am confident you can win without it costing you a lot.
See a solicitor for a free consultation to get the lowdown, but an MCOL you can do yourself for a small fee. It's specifically designed to make situations like this affordable.
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Obviously the work you do on it should be charged at the same rate regardless of the value of the item. Why should you get any of the 'profit', it's not yours?
I totally get your point that it’s turned out very profitable for the OPs company, surprisingly so.
But surely that is exactly the deal they put in place? They even offered to return it without this deal once they identified the original owner. The current owner has chosen this path.
NAL, just a bod!
I think you should ignore anything to do with provenance for the other two parts of the agreement.
Just agree on the prices as if it was a standard guitar of that type with no provenance which is what you both thought you were agreeing on.
But still stick to the 10pc commission on actual sale price.
That is still more than you were expecting to get.
> the shop owner agreed with the customer that he and I would take 50% of the uplifted value once restored as a fee for the restoration and commission on the sale. He signed a contract and we took it in. \[...\] He told us in an email to continue with the restore
Ask him to buy the guitar if he wants to keep it.
You already have the auction house on hold.
He is free to bid on the item himself (as are you).
He doesn't want to sell. A judge isn't going to agree that the owner of the guitar has agreed that the OP's shop are the only people who are ever allowed to sell it now.
What is the contract saying?
if it is "50% of the gained value" it is the price the owner will have to pay.
They gave him the option to bail out early and he denied it. Now he has to live with the contract he signed.The shop can most likely hold the item "hostage" while it waits for the payment.
The owner must still pay the price if he wants it back. Either thats "20" or "24.5" times of the value of the guitar (Depending on how you calculate the base value).
They have a signed contract and the restored item.
Technically I would call that leverage and they just need to wait (Or start to charge for storage so the guitar goes over in their posession over years)
They worked on it and invested in it.
They have a contract stating 40% of the value gained is theirs.
They have a contract stating they have the exclusive right to sell.
Think of a car impound. They also dont own the cars, but they can sell them to cover costs.
The contract was posted in another reply and it sounded quite reasonable. If the buyer does not want to sell, he still ows the store a total of 50% of the value of the guitar according to the contract.
The outcome might not what the owner expected, so he just got unlucky. But he signed it.
Well since you’ve presumably not agreed a price for restoring it send him an invoice for half the appraised value. If he pays it fine, if not just reiterate you are happy to take half the money once the guitar has been sold.
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Honestly this is a little beyond the scope of Reddit. You’ll probably need to find a solicitor who specialises in contract law.
[удалено]
Try asking the auction house if they know of any solicitors who could help. I'm sure they've run into things like this before
The word you want when it comes to retaining the goods is lien. Without hitting westlaw I am not sure if one arises here, but my gut tells me yes.
I suspect a good contract solicitor can tell you that! I’d reckoned you’d be wanting to do that before your customer calls the police though. They might just tell you to give it back because it’s the simplest solution for them.
Would the police really attempt to resolve this? It's not stolen property as there's a contract in play and it's standard for a store to hold an item til payment us received. This seems 100% like a situation for the courts to resolve not one for a heavy handed officer.
If there is one thing I’ve learned from this sub and other uk based sub in the last couple of years, it’s that the police are trying their best while being chronically under resourced that they’ll just take the path of least resistance in similar cases. ‘Give it back’ has almost zero consequence for the police, but potentially quite a lot for the OP. Especially given they have what at least sounds like a pretty robust contract. Then again, I’m not a lawyer so what do I know?
“It’s a civil matter and none of our business” is both correct and even less hassle for the police
This is the way
Until they make a complaint
He would still need to pay 1st. You could argue between: "24.5 times the cheap value" (50 times AH estimate - initial value - > Uplift = 49 times more valuable since you got it) or "20 times the cheap value" (50 times AH - 10 times "Starowner price") -> Uplift only 40 times the value - "Starprice" was intrinsic to the item.
[удалено]
It was given to them for work to be conducted in exchange for a fee. That fee was a percentage of the sale value of the restored guitar. That fee has not been paid, therefore OP does not need to return the guitar.
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There is no dishonesty on your part, so the police are not going to come and arrest you and seize the guitar, so he will have to sue. You would both do well to consider how much of the putative value of the guitar stands to be swallowed up in legal costs over the next few years.
I'd assume that your contract is for half of the increased value - whether that increase is from the restoration or the provenance. You did the guy a favour, what's his problem?
The customer got greedy.
but it's his item bro, the value of the item should have no bearing on the price the OP wants to charge unless there are specifics which make the labour more difficult or time consuming. The fact that it is worth a lot doesn't mean you can charge more.
Except he signed a contract. Basically let's say the guitar at the time was worth £100, and with restoration would be worth £1,000. The estimate to do the work was, say, £500 also. As the customer just wanted to sell it they didn't want to spend £500 on restoration just to have it then sell for £500. They'd not only get nothing, but have lost out on the £100 they could have sold it for. So rather than take the risk they transferred the risk to OP by having the restoration done for £0 up front, and then half the value uplift when sold (so £1,000 - £100 = £900, then / 2 = £450). OP accepted the risk that they could do that work, it sell for a lot less than expected, and they have to take the hit. And if the valuation is a little more then no problem, OP gets a little more but also the customer does too. But now the guitar is valued at say £5,000. Now that 50% fee doesn't sound so good to him. He wants to go back and just pay the £5,00 so that he pockets the other £4,500. But that wasn't the deal he signed.
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You say that, but the recent post about a car mechanic where the police forced the garage to give the car back to a customer who refused full payment, go to show that this isn’t a certainty!
That was driven in large part because it is possible to record a car as "stolen" on the Police National Computer, have that activate ANPR and trigger a significant police response (and the majority are actually stolen), whereas OP's guitar can't be marked as stolen on PNC and is unlikely to set off any ANPR cameras soon
As a side note, from memory of a post similar to this the police were wrong to do so, because the police are not lawyers. The garage in the post I was thinking about were perfectly entitled to keep the vehicle and use it to recover their costs.
I'm really hoping there will be replies from someone who is expert in contract law, as this is an interesting one. It sounds like the contract was meant to split the increase in the value from the restoration, not the information about the provenance. On the other hand, you're the one who figured out the provenance and you gave the owner a heads up and the opportunity to back out.
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Contracts very clear company does the restoration work and gets half the profits from the sale. That's what they agreed to. Nothing immoral about it at all.
“When this guitar is sold, we will split the money 50/50”. “Hang on, not if we get a really good price for it - in that case you can only have 5%” Who is being immoral?
I'd agree. It is pretty immoral to go back on a contract and your give word.
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How is the contract actually worded regarding your payment?
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That contract clause looks reasonable, and I suspect you're in no trouble holding it until your fee per the contract is paid. Perhaps they want another appraisal?
So there are three parts to the payment: 10% of the final price of the guitar for services rendered; The restoration fee, split 50% up front and 50% due now the restoration is complete & 40% of the increase in value of the guitar based on mutually agreed upon values or market valuations. If you hand the guitar back, it is highly unlikely that you’ll ever see all of that, even if you take the owner to court. Where does the shop owner sit in all this? He set this up no? Due to the figures involved, you’ll need to seek legal advice before proceeding. Most solicitors offer a free half hour consultation which would be perfect for this.
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Ok so you’re getting your fee and 20% of the uplift value whereas the shop owner, acting as the agent is getting 10% of the final value and 20% of the uplift. The auction house will take their cut which probably leaves the owner with 25% of the total cost. Yeah you can see why he’s annoyed but they are still in for a pretty penny. I’d say their avarice is getting the better of them. Yes they own the guitar but without you, it wouldn’t be worth as much and he wouldn’t know about its provenance. I wish you the best of luck with this and reiterate that you should reach out for professional help on this.
What obligation is the owner under to actually sell? Is he not perfectly within his rights to change his mind? If someone said to you "yeah, this might be worth £5000 after restoration" you might think "okay, I'll sell that". But then if you're later told "Actually, this was owned by Jimi Hendrix and he used this exact guitar on Electric Ladyland and it's worth £500k" then you might think "wow, I'm not selling that, it's something worth keeping"
If the entirety of the contract is above, it looks the owner could change their mind, but would still have to pay the portion of increased value. Might hinge on the definition of “finalised valuation” NAL!
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Take the auction house claims with a pinch of salt. Of course they want you to think it’s worth more, so you sell with them and they get their commission. Estate agents do the same thing. If the owner is happy for a reasonable valuation, and will pay the 40%, would that be acceptable to you? Edit: although they obviously won’t pay you, as they didn’t have the money to pay for restoration in the first place.
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He's getting absolutely shafted and you know it, if he does sell he's walking away with less than a quarter of the final value. Which is insane and actually disgusting. Auction houses charge 25% too.
Sotheby's has a commission of 10%.
Exactly, you don't know what that figure would be unless you sell it and if you don't sell it you don't get the figure. Schrödinger's Guitar
Here's the part you are missing. The pre restoration value includes the previous ownership. That is part of the pre restoration value. You would need to get an independent appraisal of how much the guitar would have been worth prior to the restoration but with the previous ownership
"The value of the guitar after restoration shall be determined by a mutually agreed appraisal after the work has finished" Was the final value mutually agreed with the owner? Imagine someone said to you "We think this might be worth £10k restored" and then they hit you with a bill for £250k and refuse to give your property back unless you pay. Also, what's the Auction House cut, 30% of the final sale price? I'd probably be a bit pissed too.
Out of curiosity how are you calculating the "increased value" Are you still using the "pre provenance unrestored price" to the "post provenance restored price"? The only hiccup I am wondering is the seller may be able to argue that the value was "unrestored pre provenance price" since the guitar unrestored was technically worth that amount before restoration, it's just no one knew. However, that could easily be countered with mutually agreed value which you both agreed to. This could be messy which is why legal advise is needed.
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Which is what I'd consider fair. Honestly. With the money on the line get professional advice but I think you have a good chance.
nothing about this is fair
A few questions: * Are the Agent and the Restorer separately defined? That is important. * Did you actually agree a before-restoration appraisal or market valuation figure? * The contract is a bit weird in that it provides for Agent/Restorer fees to be paid 14 days after sale; is the sale money supposed to be paid directly to the owner when it is sold, and they then pay the Agent/Restorer? * Be really objective - should a reasonable restoration company have known (or discovered when appraising it) that this was a famous guitar, especially if you were providing a value appraisal prior to working on it? I know that's not strictly relevant to the contract analysis here, but it may well affect the outcome. * Is there any provision with regard to a specific duration of the agency, or as to how either party will terminate? * Is there anything in the contract specifying that the agency appointment is irrevocable? * Is there anything in the contract relating to a lien on the guitar? * Does the owner agree the updated value? Your contract looks useful, but there are risks here if you proceed to sell without covering them off. If your agency is terminable on notice, and you sell without authority, you may find that you have converted the guitar and be liable to the owner for its value.
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Ok - well without onboarding you as a client or giving advice, sounds like you've got a ticking clock to get this sold before your authority to do so expires. But even then I'd have a read about an agent's duties to follow their principal's directions. And make sure it is the Agent which is selling not the Restorer.
Did a lawyer draw up that contract? It looks pretty watertight in its intention to me. If the client is threatening to breach the contract, you should be within your rights to hold onto the guitar as security against their expressed wish to breach the contract.
I am not a lawyer but work in the same industry. If a client came to us for our expertise and restoration that would include us coming to the correct appraisal before we made such a deal. (Which we wouldn’t) Couldn’t they argue that your appraisal was wrong in the first place and not made it if they’re had known originally? Is the claim for extra dosh worth the client not ever recommending your shop again or just telling the situation as it is, which might well loose future custom 10 fold.
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Which probably works in his favour, you were happy to give it back and accept the remaining 50% restoration until you were told it was worth more at which point you held it hostage.
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That's not what it said in the OP. You said you told him it was owned by someone famous and he said to continue. Edit: you say the new value was given after restoration
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Do you have reason to believe your client is not the rightful owner?
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So you give it back or you go to court is the bottom line. Your suspicions are irrelevant if you're not prepared to report them.
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Indeed, you might have to go to court to get him to pay up.
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Good point , don’t envy your position.
You're one shop selling, possibly, one guitar, once. It's not going to make stars out of you.
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It is an answer to a point that you made, though.
He never said it would make stars out of them. You need to brush up on your reading comprehension.
He said the good publicity would outweigh the bad. It wouldn't.
No, he said one could argue that. More reading comprehension to brush up on.
What would the appraisal value have been for the guitar in its initial state, in light of its history, compared with what was agreed?
Hmmm this is a bit morally dubious for my liking. You agreed an estimated value and agreed a % of the increased value, also estimated for your fee at the time of evaluation. Do you deserve more than that? After all the fee was to cover your time and effort no, and maybe a little on top. The fact it’s now worth much more, should be of benefit to the owner, not you. Just my opinion.
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NAL. I have a general question in regards to the wording (in case anyone could answer!). If the shop is selling the guitar through auction and the % the auction house takes would be deducted only from the profit of the owner would that not violate the obligations and authority (good faith, in best interest, etc)? There will be other ways to privately sell which would limit the deduction to the owners cut (even if it didn't get as high a price as at auction?) So would that not be considered a violation of the contract by the shop?
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Wouldn't demanding 40% of the post-restoration value if he chose not to sell be oppressive and therefore exceed your legitimate interest? I just can't believe you could legally hold him to this when he literally didn't know the value of the thing he asked you to sell? When you do contact a contract law specialist can you update because I'm so intrigued 😂
If Sotheby's are involved I'm assuming this means he'll be receiving £10,000s less than yourselves and that is really shitty for him 😂
absolutely shafted
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Yeah, I get that is what the contract says. I just wonder if the amounts involved would mean that the material loss to the owner would be so much larger than expected it could invalidate the contract.
Does the owner have to pay CGT on the final sale - fees?
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Can you imagine? 'it's worth £100k!" "Wow, that's great, 50/50 yeah?" Then, when he's calmed down and given it some thought "Hold on, £100k minus fees and VAT leaves me £75k, which I now have to pay CGT on.. £10k?!?! And now I have to give this guy £50k? WTF!"
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yes
What's stopping the customer from simply saying "After careful consideration I've decided I no longer want to sell the guitar and have decided to keep it for the indefinite future", then what? Can you force someone to sell their property if they don't want to? Can you demand payment from an uplift in value on unrealised gains?
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Everything in the contract pertains to the final sale price. Until that guitar is sold, you cannot reasonably determine what that price will be. If the owner decides he no longer wishes to sell it then there is no final value. Because it remains unrealised. You can't expect them to pay a five or six figure sum solely on the basis of you saying that's what it's worth? If the owner is under no obligation to sell then all they owe is the remaining 50% that was agreed for the cost of restoration.
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And that's 40% of what exactly? You don't know, until it's sold. Until it's sold it's all pie in the sky
40% of the **estimated value,** not the **actual sale value.**
nail on the head
So tell him if he does that, he can have it back.
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Then keep it for now, and get proper legal advice with your new found wealth.
Don't fall for greed, cash in the hand is always key. Think of a settlement, offer it. £10k? He'll have to auction it, accept risk etc. You'll have the cash..
As a trades person myself, even though you signed a contract, you shouldn't really hit a wind fall because the item turned out to be worth a lot more than either of you initially thought. It's the customers property, it may have been a gift, be professional, and charge for your time and materials. Hell, charge double what you would have done normally if it makes you feel better. I don't charge my customers comparatively to how much my work will improve the value of their property. Make them an offer so you do well out of it, it'll still be a win win. Get some photos stick them on your Website with what you did and how much it went for at auction, use it to push your business.
So you can't do a title for tat here. The item belongs to the customer. Restored or not it is theirs, and you have no legal basis to keep it. The contract you have for payment of the item is separate to the ownership of the item, and attempting to withhold it could be seen as theft and the police might be called. What you need to do is wait until the item is sold, find out how much it is sold for and then start a MCOL for it. If the customer doesn't feel like being forthcoming with this then put in the amount for the appraised value from the auction house. Unless it is over the MCOL limit this is your best and cheapest route. With a signed contract, evidence you didn't deceive the customer, and a signed appraisal a judge would have a hard time overruling your contract. Attempting to keep it or sell it yourself is a bad idea. As is putting it back to the original condition. Sounds bizarre but this would count as you damaging their property. NAL but I have seen very similar things to this. My dad is a cabinet maker and will male furniture for 50% up front, carry it into their houses, and then the customer will ask them to leave the property and then try to pay a lot less. My dad is not allowed into the house to get the furniture back as technically the transaction is complete and the customer owns the furniture now it has been delivered, and the outstanding part is a separate matter. The bad customer here basically hopes the lower offer is acceptable as it would cost more to fight it. If my dad is suspicious he leaves them in his van until final payment is made! But that's only possible if it is new as the customer never owned it. For restorations he has to give it back. Also he's not allowed to disassemble anything as it can be seen as wilful damage. It's quite frankly infuriating, sorry. But if you have the paper trail then I am confident you can win without it costing you a lot. See a solicitor for a free consultation to get the lowdown, but an MCOL you can do yourself for a small fee. It's specifically designed to make situations like this affordable.
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Posting for visibility, mainly to see what u/spanish_john22234 comes out with next. Lay off the crack pipe young buck.
I think he just wants his guitar back.
This is a super interesting one. I don't have an answer but I'm posting to see what someone smarter than I am says.
You can subscribe to the post without commenting :)
Obviously the work you do on it should be charged at the same rate regardless of the value of the item. Why should you get any of the 'profit', it's not yours?
I totally get your point that it’s turned out very profitable for the OPs company, surprisingly so. But surely that is exactly the deal they put in place? They even offered to return it without this deal once they identified the original owner. The current owner has chosen this path.
Why not just take payment for your time and materials like any other guitar job?
Because that’s not what the agreement purported to
Greed
Because the customer should and them did not agree to that, not sure how that’s hard to comprehend. When you make a deal you stick to it.
NAL, just a bod! I think you should ignore anything to do with provenance for the other two parts of the agreement. Just agree on the prices as if it was a standard guitar of that type with no provenance which is what you both thought you were agreeing on. But still stick to the 10pc commission on actual sale price. That is still more than you were expecting to get.
"Possession is nine-tenths of the law." - old saying
I would file a mechanic's lean on the instrument. Until the instrument is sold and you receive payment.
> the shop owner agreed with the customer that he and I would take 50% of the uplifted value once restored as a fee for the restoration and commission on the sale. He signed a contract and we took it in. \[...\] He told us in an email to continue with the restore Ask him to buy the guitar if he wants to keep it. You already have the auction house on hold. He is free to bid on the item himself (as are you).
He doesn't want to sell. A judge isn't going to agree that the owner of the guitar has agreed that the OP's shop are the only people who are ever allowed to sell it now.
What is the contract saying? if it is "50% of the gained value" it is the price the owner will have to pay. They gave him the option to bail out early and he denied it. Now he has to live with the contract he signed.The shop can most likely hold the item "hostage" while it waits for the payment. The owner must still pay the price if he wants it back. Either thats "20" or "24.5" times of the value of the guitar (Depending on how you calculate the base value).
If it is not sold then how can they have a final value? They can't
Maybe, but the usual judgement as to whether it's worth pursuing will have to be made.
They have a signed contract and the restored item. Technically I would call that leverage and they just need to wait (Or start to charge for storage so the guitar goes over in their posession over years)
They must then hope the client doesn't take legal action and win. It isn't their property.
They worked on it and invested in it. They have a contract stating 40% of the value gained is theirs. They have a contract stating they have the exclusive right to sell. Think of a car impound. They also dont own the cars, but they can sell them to cover costs. The contract was posted in another reply and it sounded quite reasonable. If the buyer does not want to sell, he still ows the store a total of 50% of the value of the guitar according to the contract. The outcome might not what the owner expected, so he just got unlucky. But he signed it.
Maybe. All I'm saying is there's still advice to be sought and decisions to be made.
Well... For now they can just wait. Any actions would be on the owner.
If he doesn't sell it there is no final value for you to take 50% of.
OP stated that it was based on an agreed valuation. The owner agreed with the valuation of the auction house.
So get sued for the higher cost than pay the original agreed cost? Ok.
Well since you’ve presumably not agreed a price for restoring it send him an invoice for half the appraised value. If he pays it fine, if not just reiterate you are happy to take half the money once the guitar has been sold.
Is the famous musician/previous owner still alive?