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This Wisdom of the Crowd (ACC member discussion) addresses obligations to pay for unsolicited products that are sent to offices under US law. This resource was compiled from questions and responses posted on the forum of the New to In-house and Law Department Management Forums.*

*(Permission was received from the ACC members quoted below prior to publishing their eGroup comments in this Wisdom of the Crowd resource.)

Question:

We have had products show up unsolicited at various offices of ours around the country. We have a central procurement model out of our home office that purchases and has items directly shipped to field offices. Therefore, the field office managers don't have a way of knowing that the materials were not ordered for them by the home office. When they receive products, they use them or store it for later. Then these product sellers send invoices seeking payment, which don't get paid because they are not matched to an order. They ultimately get sent to collections. Has anyone else experienced something similar? I'm of the opinion that we are not obligated to pay for something sent unsolicited. Is there something under the UCC that says we are obligated if we accept delivery? Our operations group has asked legal to draft a letter telling these companies to stop sending products. I'm not sure whether that will be effective. Any advice or suggestions would be appreciated.

Wisdom of the Crowd:

  • Response #1: We have had something similar. Someone calls up and sounds like they are asking for a renewal of an order or something similar, sends toner and a bill. We have taken the position that since they made misrepresentations during the call, we are not obliged to pay. Note also that when the procurement department wanted to return the toner, they were given an address that (and I am glad someone checked before sending) was just a garage or something. Presumably, that was so the toner company could claim that we kept the toner so we had to pay.1
  • Response #2: I did a bit of hunting around and here is what I've come up with. Approximately 45 states have passed legislation on this matter, the effect of which is to deem the delivery of unsolicited merchandise as an unconditional gift to the recipient. I am not terribly certain if there is a UCC section pertaining to this issue, but there do seem to be an abundance of states laws dealing with it.
  • These provisions sometimes come under the title "Unsolicited and voluntarily sent merchandise deemed unconditional gift" in a state's code on general obligations. You could probably conduct a search for the states that are relevant for you and your company's offices. That being said, I would caution against citing sections without double-checking their applicability to ensure that businesses are covered (rather than just consumers).
  • Oregon does in fact have a digital version of its codified laws. You will find the relevant section for Oregon at https://www.oregonlegislature.gov/bills_laws/ors/ors098.html under Section 98.450 "Unordered goods presumed gifts." Oddly enough though, it's listed under Oregon's Landlord-Tenant, Domestic Relations, Probate law.
  • As [another] example, I have included an excerpt from New York State's law of obligations:
  • Section 5-532. Unsolicited and voluntarily sent merchandise deemed unconditional gift.1. No person, firm, partnership, association or corporation, or agent or employee thereof, shall, in any manner, or by any means, offer for sale goods, wares, or merchandise, where the offer includes the voluntary and unsolicited sending of such goods, wares, or merchandise not actually ordered or requested by the recipient, either orally or in writing. The receipt of any such goods, wares, or merchandise shall for all purposes be deemed an unconditional gift to the recipient who may use or dispose of such goods, wares, or merchandise in any manner he sees fit without any obligation on his part to the sender. If after any such receipt deemed to be an unconditional gift under this section, the sender continues to send bill statements or requests for payment with respect thereto, an action may be brought by the recipient to enjoin such conduct, in which action there may also be awarded reasonable attorney's fees and costs to the prevailing party.
  • At least from what I read here, you could pursue an injunction against these scammers when they send invoices. Or you could just keep on accepting it as a gift to your company's benefit (depending on the relevant state's laws and your tolerance of risk).
  • I'd be happy to look up the relevant laws for each state that you have offices in.2
  • Response #3: This tried and true scam has been around a while, and it reemerges periodically.
  • The caller typically asks for the name of the person who handles shipping supplies, hoping to use that name for authorization on an invoice after the unordered product is shipped. They may pose as someone in-house, either in office supply or procurement, and ask an unwitting associate to "verify" the type of printer they are using, and maybe even to provide the serial number. What follows is a shipment of poor quality toner at an exorbitant cost, along with an invoice that is often mistaken internally as being legitimate. To guard against this, we advise our staff to never give out the names or telephone numbers of personnel to unsolicited callers or any information as to the type of equipment being used. As with other unwanted sales calls, we advise to ask for the caller's name, the name of the company he/she works for, and his/her telephone number. Legitimate sales people will provide that information, and it should be forwarded to the appropriate manager or staff member. If the caller pretends to be someone within the company (and you are in large company like me), verify who they are (Outlook is a quick way to do this while on the phone) and ask the name of who they report to (information scammers typically do not have). Upon questioning, the scammers often just hang up.
  • We generally instruct folks to contact the shipper, inform them that the product was not ordered, will not be paid for, and they may pick it up at their expense. Filing a report with local police may be a good idea, but the likelihood of police involvement is small. The shipper will likely be insistent on payment and belligerent in phone calls, making a variety of threats about collections, etc. (After all - how else would the shipper have the associate's name, type of equipment being used and the serial number if the company did not provide that with their order?) Unfortunately, about the best that can be done is to hang up on them and ignore their invoices. Eventually they lose interest and move on to other targets. Be advised that while there may not be a contract for the toner, using it may create a quantum meruit claim by the shipper, resulting in some payment. As such, we advise not to even use it.3
1Response from: Evan Slavitt, Vice President for Business & Legal Affairs, AVX Corporation, South Carolina (New to In-house eGroup, April 30, 2015). 2Response from: Matthew Grogan, Corporate Counsel, Sweet Sam's Baking Company, New York (New to In-house eGroup, April 30, 2015). 3Response from: John Lawler, Associate General Counsel, Penske Truck Leasing Co., L.P., Pennsylvania(Law Department Management, April 30, 2015).
Region: United States
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