What to do if I put a $500 deposit down on a used car but then decided I did not want the car and now I can’t get refund?

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What to do if I put a $500 deposit down on a used car but then decided I did not want the car and now I can’t get refund?

No contract was signed; this transaction took place over the phone.

Asked on April 12, 2012 under Business Law, Minnesota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Even without a written contract, you most likely cannot get the deposit back. An agreement can be formed orally and/or by behavior as well in writing--a transaction over the phone plus putting down a desposit would indicate an agreement to purchase the car; moreover, the deposit is put down specifically to induce the seller to hold the car for  you (not sell it to others). The implicit agreement in putting down a deposit as part of a transaction is that if the buyer breaches the agreement by refusing to go through with the transaction, the seller is entitled to keep the desposit as damages.


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