Memphis, TN asked in Business Law and Contracts for Tennessee

Q: I am an Interior Designer. Am I legally obligated to provide a copy of my cost invoices to clients that I sell to?

I sold custom made cabinets to a client 6 months ago. They were delivered as ordered, I invoiced him and he paid for them. Now, due to budget problems, he wants to return them. I told him there are no returns on custom cabinets. He understands that but wants to contact my supplier. I don't want to give him that information. Am I legally obligated to do so?

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2 Lawyer Answers
Leonard Robert Grefseng
Leonard Robert Grefseng
Answered
  • Columbia, TN
  • Licensed in Tennessee

A: If I understand correctly, you bought the cabinets and resold them to your customer. If so , you are not obligated to share your business information with anyone- it was your purchase and no one else has any right to make you disclose any details of your business. However, if a lawsuit gets filed, I suspect the information could be obtained through court action since it is not "privileged" ( like your medical records, etc). On the other hand, if the purchase order or invoices have your customer's name on them, it is less clear that you were the direct purchaser from the supplier, and therefore, the transaction looks like a sale directly to him ( and you were only acting on his behalf- as his "agent" ( "agent" has a legal meaning).

Mr. James Charles Wright
Mr. James Charles Wright
Answered
  • Knoxville, TN
  • Licensed in Tennessee

A: This will really depend on your contract. I am assuming the contract is directly with you for the purchase of cabinets. You probably have a mark-up from your costs that you would prefer to keep from your client. You probably have a contract that simply says the client will pay you X dollars for the cabinets. Hopefully your contract with your client says there are no returns. Based upon this I would say there is no legal duty outside of a lawsuit to provide your costs. This would be analogous to you buying a car from a dealership and then deciding you wanted to contact Ford to find out about returning the car - or what the car's actual cost was.

I agree with the comment from Mr. Grefseng that in a lawsuit the cost would likely be discoverable.

This is, more than anything, an uncomfortable situation as you would want to help your client (I am assuming) You may want to offer some type of adjustment if it really is simply a financial issue for the client.

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