Legal Question in Real Estate Law in Maine

return of earnest money

Had a business for sale without a broker. Buyer stated that the purchase was going to go through. Led me on for almost a year stating that they were definately going to buy the business. I turned down several offers believing the sale was all but complete. Finally gave me earnest money and stated that it would be a month till closing. Several months went by and I did not list the business for sale with a broker. Buyer then stated that the deal was not going through because they did not want to be in that kind of business anymore. Am I required to return earnest money even though they led me on for such a long time and they terminated the agreement?


Asked on 11/15/07, 10:08 am

1 Answer from Attorneys
Jerome Gamache Ainsworth Thelin & Raftice, P.A.

Re: return of earnest money

Essentially, the agreement to sell the business, at what price, on what date, the holding of earnest money, etc is a contract. Was there a writing of the terms? If it was verbal, then your email recitation of the course of dealings seems to support a good faith retention of the deposit if the buyer's reason for backing out was not due to a verbal contingency failing. On the other hand if there is a written agreement, it will control. If the written agreement does not contain contingencies, then the buyer's failure to close is a breach and you are entitled to retain the deposit. The buyer should be aware that if you have actual, proveable damages due to the failure to close, you could sue a breach of contract theory and reliance, so it may be better for the buyer if you just retain the deposit and walk away from each other.

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Answered on 11/15/07, 10:19 am


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