Return of down payment

UPDATED: Sep 30, 2022

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Return of down payment

I’m selling small turn key restaurant. Guy made offer which was accepted
and put 1000.00 down payment. When met up two weeks later for final
payment and sign lease he backed out. Since I stopped showing the place
and turned away perspective buyers does he get his money back since he
is the one that backed out at the last minute.

Asked on March 14, 2017 under Business Law, New Jersey


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

No, he does not get his deposit back. The purpose of the deposit is to ensure performance by giving the buyer some reason to go through with the transaction, or else lose the deposit. In this case, he breached the agreement, by not carrying through with the purchase; his breach entitles you to keep the deposit. Had it been you who was unable or unwilling to continue, you'd have to repay the deposit--you can't refuse to perform and keep the other side's money. But that is not the situation here.

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 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.

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