What to do if my LLC agreed to purchase equipment from another business and we put down a down payment to hold the equipment until financing was secured but we were not able to find financing?
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What to do if my LLC agreed to purchase equipment from another business and we put down a down payment to hold the equipment until financing was secured but we were not able to find financing?
The business sold the equipment to someone else. Are we entitled to our down payment back?
Asked on March 9, 2013 under Business Law, South Carolina
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
Typically, you would not be entitled to your down payment or deposit back, if the problem was that you were unable to carry through with the transaction (e.g. couldn't find financing, and so couldn't pay the balance due and owing for the equipment). When the buyer defaults on the sale, whether through the buyer's fault or not, the seller is entitled to keep the deposit, unless the agreement of sale specifically said that under such circumstances, it would be returned.
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