Legal Question in Business Law in California

Re: Escrow Default

The first question here has got to be who wrote the contracts, and what do they say? Who is the escrow holder? Is there real estate involved, or just personal property? Why is there an escrow, anyway?

If the contract for sale of the business was thoughtfully prepared, it will have provisions covering what happens upon default of the buyer (or seller). If the contract lacks any language providing for terminating escrow, default, return or forfeiture of the deposit, you will either have to negotiate a resolution, or someone will have to sue. That burden may fall upon you, as the injured party, especially because the buyer is unresponsive.

So the answer is that whether you get the deposit or not, or whether you may be entitled to even greater damages, or maybe nothing at all, depends upon the contract between you, which of you has breached the contract, and what the damages are, if any, that have resulted from the collapse of the deal.

The process starts with reading your contract carefully, and after that quick first step, you'll probably want to go back to the lawyer that represented you or to get a lawyer to represent you. A deal that warrants a $10,000 deposit is too big to do without professional assistance.