QUESTION
Are we obligated to give the good faith deposit back when the buyer defaulted on contract?
Asked on Apr 13th, 2018 on Breach of Contract - Alabama
More details to this question:
We were selling our house ourselves because it was considered a mobile home that was over 20 years old and we were told it had to be a cash purchase basically and we weren't going to get that much to begin with. We had a buyer that In December 2017, asked could we hold it for two months, that he was supposed to get his bonus in February and could pay in full then. We agreed if just for two months with a $1000 good faith deposit to hold it. I just typed up a simple agreement myself with a closing date of feb.28,2018. We never could get a specific answer when asked if they would have it by the 28th,they kept wanting a key to house to go ahead&work on it&we no longer lived there &didn't feel comfortable with that. We informed them we couldn't extend past the 28 due to not feeling comfortable they were ever going to have it since a specific date couldn't be given. He told me to sell to another buyer but no other process was started until after the 28th.
1 ANSWER
That depends on the parties' agreement. Here, it doesn't seem as if you ever discussed the issue. In my opinion, unless the parties specifically agreed otherwise, the obvious understanding was that the deposit was nonrefundable, because what was the purpose of the deposit if it was intended to be refunded if the buyer backed out? However, a court may disagree and may find tha thte deposit was intended to be refundable, particularly if it is customary where you live that such deposits are considered refundable.
Answered on Apr 13th, 2018 at 11:19 AM