What is the law regarding the return of a deposit?
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What is the law regarding the return of a deposit?
I own an LLC and my business sold a piece of equipment to another business. A sales contract was drawn up that stated the equipment was to be moved by a specified date. A deposit of half the sale price was accepted and the balance stated to be due at the time the equipment was picked up. The buyer failed to remove the equipment by this deadline. No, 5 months later, the equipment was sold to another buyer. I received a phone call from local law enforcement and was told that I am being charged with criminal theft of the original deposit. The sales contract did not specify if the deposit was refundable or not. Where do I stand?
Asked on April 21, 2014 under Business Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
Refunds are only required if:
1) the seller defaulted (violated or breached) his obligations in some way, such as by not providing the product or service which was ordered, providing a defective product, etc.; or
2) the contract, agreement, or terms of sale specifically state there will be a refund.
Also, deposits are specifically not refundable when the buyer defaults, such as by not paying the balance due, again, unless the terms, etc. of sale make them refundable. From what you write, if the buyer did not pay the balance, you'd be entitled to keep the deposit as long as the equipment had been available to them when it was supposed to be. You should explain the circumstances, along with copies of the agreement of sale and any other documentation or corresondence, to the authorities, to show that you kept the deposit because the buyer defaulted.
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