If a used car buyer backs out of buying a car do I have to return the deposit even if i didn&#39;t explicitly say it is &quot;nonrefundable&quot;?
<p>I have a person who said they were going to buy a car from me on craigslist. Then 3 days later he backed out. He is now threatening to sue me since I won't give him his $500 deposit back. His only argument is that I never explicitly said it was nonrefundable. Does he have any legal ground? Any recommendations?</p>

<p><strong>EDIT</strong></p>

<p>Just to clarify why I am not returning it. I normally would out of kindness but the car is a bus that I rent out on Airbnb. I had to cancel all the reservations and lost out on a couple of hundred dollars with just that. Plus the only reason I asked for it was that I had a hard offer from someone later that day. I was just trying to be nice but In retrospect, I should have sold it out from under him.</p>

<h2>He may be entitled to (part) of the deposit or he may owe you more money</h2>

<p>When you and he agreed you both entered a legally binding contract - you are obliged to sell the vehicle to him, he is obliged to buy the vehicle from you. </p>

<p>The deposit is merely the first instalment of the payment for the vehicle with the balance being due on delivery. They are not refundable by default.</p>

<p>He now wants to repudiate the contract and you have several options:</p>

<ol>
<li>you can refuse his repudiation and require him to complete the contract within a reasonable time. He probably won’t do this so when he doesn’t we move on to one of the other options. In essence, this is simply a warning shot that if he doesn’t complete the contract you will move on to item 2.</li>
<li>you can accept the repudiation and sue for damages, these would include your lost rent, pro-rata of registration, insurance etc. from the time you would have sold to the time you do sell, any additional advertising, any difference in the price you ultimately get if it is lower than his offer etc.</li>
<li>you can accept the repudiation in return for keeping the deposit in lieu of the actual damages. This in makes the deposit a liquidated damages amount and it must follow all the same rules, basically it must be a genuine pre-estimate of the damage you would suffer and not be so high that it amounts to a penalty.</li>
<li>You can accept the repudiation and, as a gesture of goodwill, return some or all of the deposit.</li>
</ol>

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