When is a down payment fully refundable?

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

When is a down payment fully refundable?

A family member wanted to purchase a motorcycle and gave a down payment. There was no written contract although the buyer send a text stating, “I am serious about the bike, do not sell it”. After 4 months he states he cannot be approved for a loan. Now he wants a refund. He was given back over half and we kept the rest. He sent a letter by mail requesting the remainder of the balance or he will take us to small claims court. What’s the law.

Asked on June 27, 2011 under Business Law, North Carolina

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

In most States a down payment for an article is refundable unless there is a written agreement signed by the intended seller and intended buyer that the amount placed as a down payment deposit is not refundable and is to be considered a "liquidated damages" deposit.

You gave back one half of the deposit placed for the motorcyle. Your action of voluntarily giving back part of the deposit suggests that the entirety was fully refundable since there is no written agreement to the contrary.

Given the circumstances, it makes sense that you consider returning the balance of the deposit and focus your efforts in selling the motorcycle. Personally, you should have resumed your efforts to sell the motorcycle after one month passed after the deposit was placed when the amount agreed upon was not paid in full.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption