Can a company hold my refund until I sign a release?

3 weeks ago

I bought an item online and they misrepresented the product. After the CAD drawings were done it was not going to work. Now the copy is withholding 10%. Ok not a good deal live and learn and don’t pay upfront, however know they wont give me my money unless i sign a release agreement saying i will not say anything negative about their company.

Senior Legal Associate Levelset

That may ultimately come down to the terms of the original agreement and/or the terms of use that establishes the relationship with the company withholding the refund. If the contract has a refund policy, then that policy should be followed. Further, it’s common for a contract to merely refer to a more broad terms of use or service agreement – and, if those terms create a refund policy, then that policy should be followed. And, if there are certain provisions in either the contract or the terms of use that should be followed, those terms will dictate how the refund process should go – including, potentially, whether a release must be given.

In a situation where there’s no contract or terms provision guiding how the refund process should be managed, the company providing a refund may be entitled to set their own terms on the refund. So, it’s possible that they’d be able to negotiate the terms of providing the refund – like requiring a release. And, it’s also pretty common for a contract or terms of use agreement to allow some leeway for a company to create terms for their providing a refund.

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