Legal Question in Consumer Law in Pennsylvania

Re: Deposit Refund when Buyer Backs out

You asked about refunding a deposit.

In a sale the transaction actually takes place when there is a meeting of the minds. A deposit is a good faith payment used to assure performance and "seal" the deal.

Generally deposits are treated as non-refundable in sales by private persons. There are some exceptions which you may want to investigate. The idea of a non-refundable deposit is meant to protect against the situation you describe. A seller takes the merchandise off the market and forgoes other potential sales because the seller has a purported sale.

If the seller is a dealer in the merchandise then specific laws or regulations may overcome the general rule.

As a matter of course, if you are able to sell the merchandise for equal to or more than the prior offer, then it is not uncommon to refund the deposit less any costs in obtaining or closing the later sale. If the later sale falls short of the amount of the prior agreed sale then you could have a claim against the balking seller for the deficiency. Generally this claim is satisfied by the amount of the deposit. If the deposit didn't satisfy the deficiency you could even have a legal claim to the deficiency in excess of the deposit.

All said, the party may sue on the deposit and depending on circumstances they may win. But I would bet not.

Regards,

Roger