Can I legally get out of this deal or do I have to go through with it?

You can get out of the contract under the doctrine of impossibility of performance. All lawyers learn it their first year of law school.

Usually deposits are forfeited. How do you get out of a deal you signed what is the purpose of signing a deal? If it doesn't mean anything why go thru the motions.

If you have no written agreement and no work has been preformed you can file a small claims to get your money back. You will have to show that their was not meeting of the minds and therefore no contract. It will be up to a judge to decided if their was any meeting of minds.

It is complicated but basically service contracts are enforceable only to the extent that services were provided or made available. If for example, the landscaper has already declined business from other potential customers for the day that the work was intended to be done, then the money may not be refundable. If however, the landscaper is able to find alternative work for that day, then you likely cannot be charged.

Based on your description of the facts, it sounds as though it is impossible for the landscaping to be performed due to utility issues; presumably, doing the landscaping would be impossible and/or unlawful. If so, you have at least two colorable defenses impossibility of performance and illegality of the contract. Under those defenses, you have a right to get out of the contract and get your money back.

If it is impossible for you to go through with it, you may be able to break the agreement.

This is called "mutual mistake of fact". Both of you wanted to go through with the deal, and would have, had it not been for the underground utility, unknown to either of you. Maybe you and he could work out an alternative plan? If not, you are off the hook. If you want, you could offer a nominal amount as a peace offering so you don't have to worry about him coming after you. Otherwise, he can sue you, and you can defend. If that happens, find a lawyer who can tell you the story of "Rose of Aberlone". When you do, you know you've found the right lawyer.

The contractor is wrong: if the objective of the contract is impossible or illegal, the contract is unenforceable. The contractor should refund your deposit, minus money it expended on purchase of materials and/or equipment for this project (if the purchased items cannot be returned or used on another project). Sometimes, a contractor can also claim compensation for "lost business opportunity" if it had to forgo another job because it was bound by your contract; but these claims seldom succeed. The problem is that, in practical terms, there is little hope that the contractor will give you any money back voluntarily; if you want any part of your deposit back, you would have to ask the court for it. So, if the deposit was large enough to justify the expense of fighting for it, hire an attorney as soon as the contractor refuses to refund the deposit. Otherwise, chalk this loss up as the price of not doing due diligence before taking the project to a contract-signing stage.

You'd have to find a lawyer that has dealt with this before and/or pay a lawyer to do some legal research on the issue to give you an answer. Typically the written contract/agreement controls per Michigan law; however, if there is nothing in the contract re: cancellation, then Michigan case law would apply (and I am sorry that I haven't researched this issue any time in the recent past so as to be able to tell you what the current case law says). More than likely the case law would say that the principles of equity would apply and that for the contractor to keep the money if he hasn't actually ordered materials that can't be used elsewhere and hasn't actually incurred any labor expense, that you would be entitled to a refund. Small claims court has jurisdiction of claims that are up to $5,000 and you can represent yourself therein and attorneys can't appear, but a corporation can remove the matter to District Court. So I'd think you'd probably want to crank up a Small Claims court Complaint and say that the contractor was unjustly enriched by keeping money for a job that wasn't actually performed. You can also call up the local tv problem solvers and file a complaint with the BBB.

Impossibility of performance may be a defense to a breach of contract claim. You should consult a local attorney. Paying the attorney to research the issue and write the contractor a letter now may save you money in the long run.

You indicate: "We discovered during the utility marking that we cannot go with the landscaping". Does this mean that the City or a utility company or utility district has an easement that prohibits what you want to do, or have you just had second thoughts on going with this contractor? The answer makes a difference. Is the contractor saying "You signed a contract; you paid us 1/2 down; you can't cancel the contract; we get to keep your deposit". That also make a difference in terms of your problem and the resolution thereof.

I would have to see the actual contract.