Legal Question in Civil Litigation in Massachusetts

Is this deposit refundable?

I accepted a 500 dollar deposit for some property. I did not say in the contract whether or not this deposit was refundable. The buyer did not pay the balance by the agreed upon (in writing) due date, and is now expecting a refund of his deposit. Am I legally obligated to refund him?


Asked on 6/08/08, 12:10 am

2 Answers from Attorneys
Christopher Vaughn-Martel Charles River Law Partners, LLC

Re: Is this deposit refundable?

What was the purpose of the deposit? Did you indicate to the buyer at any time that the deposit would be refundable if s/he changed his or her mind?

I would assume that you are entitled to keep the deposit, which I am guessing was paid in order to guarantee that the property would be available to the buyer upon payment of hte balance. Under those conditions, if a deposit were refundable upon the breach of one of the parties, that would seem to defeat the purpose of taking a deposit in the first place.

More facts would be necessary - especially the language of the contract - to determine the actual nature of this deposit, but you are probably safe in retaining the deposit.

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Answered on 6/08/08, 5:15 pm
Joseph Murray Joseph M. Murray, Esq.

Re: Is this deposit refundable?

Whether the deposit is refundable depends on the language of the contract and whether you "earned it" by withholding the property from the market, for example.

If in doubt, take the contract to be reviewed by an attorney.

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Answered on 6/20/08, 1:47 pm


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