View Full Version : To refund or keep deposit when buyer does not proceed

09-07-08, 02:52 AM
Hi just wondering if anyone knows the law in regards to refund of deposit. I put a $250 deposit on a $1000 mare and within 48 hours advised I did not wish to go through with the purchase. The owner will not refund my deposit. Any advice appreciated.x(

09-07-08, 02:59 AM
Not positive on this although it has come up before, but I think they are within their rights to keep it.
As they may have turnt away other potential buyers in that time that they cannot get back (due to many reasons).

09-07-08, 03:01 AM
You should not expect your deposit back.

It is unreasonable as the previous poster said they have lost a sales opportunity and will incur further costs in readvertising.

09-07-08, 03:07 AM
I can completely understand keeping the deposit if there was a week or two but not even 48 hours. The mare was not advertised. The lady rang me. I said to take $50 out for advertising and the 48hour incovenience but she did not advertise it.

09-07-08, 01:42 PM
I can see both sides here.

Maybe a call to Consumer Affairs will advise you of your legal rights. They deal with everything consumers buy so I can't see why a horse would be any different. Let us know what you find out.

09-07-08, 02:31 PM
Great idea! will do.

09-07-08, 02:39 PM
Apologies if this seems harsh but............48hrs is two days. It would constitute a fair cooling off period. I'm sure the seller percieved you as a mature, intelligent individual who was capable of making considered decisions. Their argument will be that you appeared genuine and based on that perception they decided to advise others the horse had been sold.

Be thankful its only $250 not $2500.

Write it off as experience and try not to make financial decisions based on emotion in the future.

09-07-08, 02:43 PM
i wish we were back in the good old days when people took responsibility for their own decisions and didn't expect THE LAW to bail them out when they make a poor one.

we don't know the circumstances here or why you changed your mind but one thing is certain. that small amount is not worth pursuing in even a small claims court. you know it and the seller knows it, therefore jumping up and down and threatening legal action isn't going to work even if THE LAW is technically on your side.

you made the decision to buy and then backed out of the deal. to my mind, the loss of the money is a just consequence of a poor decision freely made.

it's a hard lesson but one we should all learn. do your thinking and investigations BEFORE making a deal and handing over any money. then, nobody would feel mucked about and hard done by.

Bad Bones
09-07-08, 02:52 PM
Concumer affairs is a great idea.
I think this is a very grey area though.
From sellers point of view she may have held off advertising because you wanted horse & subsequently missed a deadline which could mean the cost of upkeep for horse for an extra 'x' number of weeks depending on type of publication she uses.
Therefore the costs involved in you pulling out of sale are more than just the cost of 'advertising' or 're-advertising'.
It's a very complicated situation.
Out of curiosity why did you change your mind about the horse?
Was there something wrong with it? Unsound? or just not suitable? or did you just change your mind?
If there is something wrong with the horse that the seller didn't tell you about then you might have a legitimate reason to get all of your deposit back.
But if you just 'changed your mind' about that particular horse or about getting a horse at all, then I would think that the seller may have a good case to keep the deposit.
From her point of view she was selling the horse in 'good faith' and you broke the contract for no 'good'reason.
You can't pay a deposit for 'while you think about it' and then expect the seller to just give it all back when you decide not to go ahead.
By the same token the seller can't take a deposit and refuse to return it when it becomes obvious that there is something wrong with the horse that they didn't tell you about during the initial agreement.
The really really complicated situation arrises when a horse gets injured after a deposit is taken. Most reputable sellers will return a deposit in this situation. however if the buyer has taken an excessive amount of time to pay for horse then they may have legitimate grounds not to return deposit or re-adjust price.

09-07-08, 03:05 PM
A deposit is as good as a signed contract, if you back out you lose your deposit. Us sellers have to have some sort of protection against buyers. Imagine if everyone had to give a deposit back? Whats the point of giving one then? Just for you the buyer to secure the horse? Forget old seller who might survive of his stud!
Im sorry I have had this happen to me over a pony becasue she fell pregnant a week after handing me the deposit! She got very nasty when I said no. To me its her bad luck, I fed pony and worked it and kept it for that week and turned away potential buyers interstate.
Sorry but its your loss, maybe be a little more choosy before you decide to buy a horse

09-07-08, 03:48 PM
I would personally like to know for what reason you changed your mind?

If you made a rash decision based on emotion and perception of a good deal, and paid the deposit on the spot, well you may just be out of pocket.

However if you paid the deposit and stipulated that on the receipt that it state that you would receive you deposit back if said horse failed vet check or suitability test from a mentor or the such, well then yes you can expect your deposit back if it was written into your receipt.

Common consumer law stipulates that if item is purchased and is found to be faulty, incorrect size, misleadingly advertised or does not do as described, the purchaser is entitled to refund or exchange. However if the purchaser simply changes their mind or simply does not like the colour etc then they are not entitled to an exchange or refund.

Now taking this to your deposit, if you simply changed your mind, well then the law is on the side of the vendor.

Personally I send people away to think about a purchase and will offer them first chance at the sale, and then let them pay a deposit later. But I always stipulate to the purchaser that until all the funds for the the sale are in my account the horse is still for sale. If other people ring I explain that horse dose have a deposit paid, but the entire purchase has NOT been finalised. I then take their name and number and will call back if for what ever the sale does not proceed.

09-07-08, 04:53 PM
If it was just a matter of you changing your mind there is no way i would refund your deposit.

09-07-08, 05:05 PM
I put down a deposit on my Anglo mare pending vet check and if she failed I got my deposit back.

Fortunately she didn't and I got to take my pretty girl home.

But if you put down a deposit it is just that. A deposit. If you change your mind for whatever reason they get to keep it. It's there to recoup their losses from taking the horse off the market for that period of time. A car salesman does the same thing and you will NOT get your money back if you decide against the car.

09-07-08, 06:16 PM
I agree with the above posts. What is a deposit for? It is in fact a part payment. I have also had people put deposits on horses and then change their mind. They seem to think that a deposit is to hold the animal whilst they make their final decision and stop others getting in before them. What is the point of taking a deposit if you just have to give it back when they change their mind? Of course, if there is found that there is something wrong with the animal, this is a different matter but buyer must be thorough and make an informed decision before placing the deposit.

I too have found this attitude frustrating when selling animals.

09-07-08, 06:42 PM
I think you are going to have to write it off as a learning experience and move on.

The seller is well within the rights to keep the money, unless you specified and both agreed that it would be refund available.

Selling a horse is never easy at the best of times, and to be given the run around by buyers is hard enough, I am not saying you gave the seller the run around, but put yourself in her shoes, the horse is for sale, than sold, than for sale again, it's a total pain in the bum, I know I would be pretty pissed off and the deposit would be my compensation whether I had advertised it of no, we all have better things to do with our time, plus how do you know if in the time you said you would buy the horse, she didn't have a genuine buyer who was turned away.

~ ~ ~ ~ ~ ~ What we learn to do, we learn by doing ~ ~ ~ ~ ~ ~

09-07-08, 07:31 PM
I actually thought it was the other way around ie unless you specifically say the deposit is non refundable, then it is refundable.

Also, deposit looks to be 25% of purchase price - is that excessive to retain?

09-07-08, 08:55 PM
i think that most of us are saying is that a deposit paid SHOULD mean a firm sale has been made. obviously we've all been burned by defaulting "buyers" who can't make up their minds and want to hold the horse for themselves until they do. it's costly, frustrating and very, very annoying. it's hard enough selling a horse without these types of people who want it all in their favour.

no, it's not excessive to retain. no one forced the buyer to pay the deposit. it was her choice at the time.

09-07-08, 09:44 PM
Earlier this year I accepted a deposit on a horse. I literally missed out on a sale by a matter of hrs because i accepted this deposit and they ended up backing out 2 weeks later. Add up a few months of cost just to keep the horse in top condition and you are looking at a very expensive "change of heart"...

09-07-08, 10:58 PM
unless deposit was "conditonal" upon vet check or other STIPULATED conition then then vendor has every right to keep the deposit. Why would a purchaser think they should get money back just because they changed their mind? A deposit forms a binding contract between parties with stated conditions that should always be in writing for both parties.

09-07-08, 11:31 PM
Interesting because I have just purchased a horse. The vendor was worried that between the time I said yes I will take her and the time I picked her up, I might back out. I was concerned she might sell the horse to someone else in the week between those dates. I didnt want to pay the full amount up front as I was concerned about giving a stranger x amount of dollars without the product in hand.

So I offered her a deposit or a signed contract. she denied the deposit and opted for the contract which then took a few days to get right and by the time I completed it (kept sending it to her for comment / change) she decided I was genuine and said she didnt need it after all and we only signed it on my request when I picked the mare up anyway!

I thought the deposit was hers to keep if I backed out (unless stipulated otherwise) but she thought she would have to return it.

I have previously taken a deposit on a horse and never really thought about what would happen if they backed out! I have always told potential buyers though that the horse may be sold and I will contact them if the sale falls through. I guess I would refund most (less costs) if the circumstances seemed genuine but thats a personal opinion.

09-07-08, 11:41 PM
About 7 years ago I had someone pull out of the sale of a pony. I was only selling it for $700. They paid a $200 deposit and were paying the rest when they were to pick the mare up the following weekend, but come the weekend they arrived with no float and were only there to get their deposit back.
The guy was very arrogant (complete opposite to when they wanted me to hold onto the pony for them....nice as pie then). Not wanting to get into a confrontation with this fool, I gave them their money back.
I would still like to know whether legally I HAD to. As far as I was concerned, I felt I shouldn't have had to give it all back but I've never bothered to look into it, so I would be very interested to know the truth about what our rights are from both sides, as a seller or a buyer.

Melly Moo
10-07-08, 03:27 PM
Based on what you have written, you entered into a simple verbal contract with the seller. For a contract to be enforceable at law there must be an offer, an acceptance, consideration (deposit was paid), an intention to be bound by both parties, mutuality, capacity (are you a minor?) and legality (is the contract for illegal or legal purposes - illegal contracts do not hold up).

It appears that you are definitely bound by the contract and the seller is well within their rights to keep their deposit, unless there were conditions in the contract, such as another poster said above, in relation to vet checks etc.

A 25% deposit may be seen as excessive to some, but how did you agree on that amount and if you were worried about the amount then you could have reduced the deposit amount as a condition of the contract, whether verbal or written. It is always safer to have a written contract however if there is an amendment made verbally then you can always try and argue that point as a condition of the contract and that it was a collateral contract to the original contract.

On another note, I came across an interesting case recently that thought might be of some interest to the Cyberhorse community and although nowadays we mostly agree upfront on issues such as vices when it comes to horses, this case is quite interesting. Roscorla v Thomas (1842) - Roscorla had bought a horse from Thomas. After the deal was completed Roscorla demanded and received a promise that the horse was "sound and free from vice". The horse was, in fact, vicious. Roscorla sued for breach of the promise. His action failed because he had not provided consideration (for the additional promise which was made after the payment of the money). The purchase price could only be past consideration - because the contract for sale had been completed when Thomas had given his assurance. Therefore, there was no consideration to support Thomas' promise and it was unenforceable - S Graw, An Introduction to the Law of Contract (5th ed, 2005). In other words "caveat emptor" (Buyer Beware) and always ensure you have everything agreed upon before handing over any money, whether that be a deposit or the full purchase price.

Just my two cents worth and only my opinion, not stated as fact.

10-07-08, 07:52 PM
It is interesting because it brings to mind an incident that happened to me about 20 years ago. I sold a horse to someone I knew; he wanted the horse for his teenage daughter and we all agreed the horse would be suitable for her. He paid a deposit and we agreed he would pay the balance (I can't remember how much it was but it was less than $1000) in 2 weeks. During that ensuing period he decided to take his teenage daughter to ride the horse (without my knowledge, permission or consent). As it happens, he also had his 11year old son (who could not ride) ride the horse. The horse spooked at something and the 11yo fell off, he sustained a cut to the head which required stitches. He decided he didn't want the horse after all, and demanded his deposit back. I wasn't sure where I stood so I sought legal advice from the base legal officer (I was in the military at the time, and so was the buyer of the horse). The legal officer told me I had to RETURN THE DEPOSIT, as it didn't constitute a legally binding contract and because no contract had been committed to paper and signed by both parties. The idiot guy who was going to purchase the horse then tried to sue me because I tried to sell him a dangerous horse; fortunately that was groundless because I stipulated that the horse was suitable for his daughter, NOT his son (for which the horse was NOT suitable) and also because they had ridden the horse without my knowledge or permission (as although they paid a deposit they were not considered the horse's legal owners). Surprised? So was I when the solicitor told me to give the guy back his money.

I always thought that if you paid a deposit and backed out/changed your mind then you lost your deposit, but this incident that I described sort of puts a hole in that theory. I think the best thing the OP can do is to seek legal advice.

10-07-08, 11:22 PM
Bugger me if I'd ever let the horse or any $ change hands without a WRITTEN SIGNED CONTRACT. Why would you not do it? It takes 10 mins to write something up covering deposits, vet checks, trial conditions (if on trial), full payment dates etc.

So many people come on the internet bitching because they thought they should get there money back. Why don't you protect yourselves in the first place? Its not rocket science...

11-07-08, 01:56 AM
You're a trusting soul Magic_Impact, and an environmentally friendly one as well ...

11-07-08, 03:03 AM
lesson is, whether horses or any other sale, get it in writing! Signed by both parties and witness. think you can get blank sale contracts from newsagent, or from EFA