Defaulting on a Layaway Agreement – What Happens?
A layaway plan allows buyers and businesses to work out an agreement to put aside a certain product while the buyers make periodic installment payments. Once the agreed-upon payments have been completed, the buyers get to take possession of the item, and the business may not dispose of the good while it is covered under the layaway agreement.
However, there are a number of issues that buyers should be aware of before creating this kind of agreement with a company to purchase a good on layaway. For example, what happens to the installments if the buyers change their mind or default on the installment payments? Or what if the business goes out of business like Circuit City did?
In many circumstances of the buyer defaulting on the installments, the business has no right to keep all of the money paid up to that point. If the purchase is never completed, the payments may not be kept by the business unless there have been damages as a consequence of the agreement being broken. But for most consumer products, this situation is somewhat rare.
