Do I have to refund a deposit on a car if the party was told it is a non-refundable deposit even though I didn’t put it in writing?

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Do I have to refund a deposit on a car if the party was told it is a non-refundable deposit even though I didn’t put it in writing?

I was going to swap a car for a motorcycle. The gentleman put $100 deposit on the deal. I signed a receipt for the money and told him face to face it was nonrefundable. He agreed. Well he misrepresented the vehicle and ended up canceling the deal. Now he wants his money back. Do I have to give it to him?

Asked on January 2, 2012 under Business Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Typically, if party A gives party B a deposit, the party A may recover the deposit if--

1) It was party B which cancelled the deal; or

2) The deal became impossible due to no one's fault (e.g. a vehicle being sold was crushed by faling tree).

However, when the party which gave the deposit is the one either seeking to cancel the deal deliberately, or is the one acting wrongfully (e.g. misreprepresentation) in the situation, or simply is unable to carry through with the deal (e.g. not enough money), then that party does not get the deposit back.


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