Legal Question in Business Law in California

Return of deposit for cancelled order
What is the obligation of a company to return a deposit ( for a custom race car ) to a customer that does not have the money to pay for the car? We since had to sell the car at less than he would have paid to make up for our investment.It has been 2 years and we are now being sued in small claims court for the deposit.

Asked on 4/08/99, 11:55 pm

Jed Somit Jed Somit, Attorney at Law

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Re: Return of deposit for cancelled order

I would need to see the contract to answer. If there was no written

contract, but only an oral agreement to sell, the seller could retain only

the portion of the deposit which represents the loss on the buyer's failure

to complete the transaction. If a court finds no contact to buy arose, then

all of the deposit would have to be returned.

Jed Somit

Jed Somit, Attorney at Law

1440 Broadway - Suite 910

Answered on 4/09/99, 7:29 pm

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