If I’m unable to come up with money to buy a trailer but I gave the seller a downpayment, can I get it back?

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If I’m unable to come up with money to buy a trailer but I gave the seller a downpayment, can I get it back?

I currently put a down payment on a trailer. The seller wanted $4,500 down payment and we gave $3,000. So he said he would use that as good faith money. He wrote up a contract saying he would hold the trailer for 30 days giving us time to come up with the rest of the down payment. If we can’t come up with the $1,500 hes asking for by the 30 days do we get our good faith money back?

Asked on July 9, 2015 under Business Law, Kentucky

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

No, unfortunately you do not get your down payment back, unless there was a written agreement stating that you could get the down payment back if you were unable to come up with the rest of the money or otherwise cancelled the sale. Otherwise, when the buyer is unable to complete the sale, he or she is in breach of the agreement; that breach allows the seller to retain the down payment as damages and, possibly, even sue you for the rest of the money--though most sellers would not in this situation: they would assume that if you don't have the money to go through with the sale, you would not have the money to pay a court judgment, either, and would content themself with the deposit. The whole purpose of a deposit is to guaranty your performance and to give the seller a reason to hold the goods for you; therefore, you forfeit the deposit by not being to complete the sale. (It's different when it's the *seller* who cannot go through with the sale--then you'd get your deposit back, since the breach would be the seller's, not yours.)


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