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QLD Buyer Pays Deposit Without Signing Contract?

Discussion in 'Commercial Law Forum' started by Baxter007, 12 October 2014.

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  1. Baxter007

    Baxter007 Active Member

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    If a buyer pays a deposit (in cash) for a business contract and wouldn't sign the contract, then disappears without a contact, and four months later comes back demanding refund of the deposit, can the seller keep the deposit under contract law as compensation for training provided (two months worth), legal costs for contract and as a liquidation debt?

    The seller held business for up to 6 months for buyer while they worked in business as trial and attempted to get finance. The contract was not subject to finance. The buyer was provided financial figures and the seller communicated these direct to buyer's accountant and bank manger. The buyer is now emailing the seller and bullying her, and making accusations that the deposit was not for contract as they didn't sign it, and that they lent it to her as a favour (they never had a conversation about this, considering the MYOB receipt provided stated the money was as deposit as per contract of sale).
     
  2. Sophea

    Sophea Well-Known Member

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    Dear Baxer007,

    Although the sale of business contract was not signed, it appears that by the buyer's actions he or she demonstrated a willingness to be bound by it or proceed in accordance with its terms. Without a detailed examination of the facts and circumstances and based on what you have said, I would say that you would be within your rights to keep the deposit. You may be able to construe it as an oral contract or in circumstances where a contract is required to be in writing, there is a doctrine of part performance under Australian contract law whereby a party has partly carried out the contract, relying on the other party's promise, the terms of the contract and any breach thereof may be enforced despite non-compliance with such formalities .

    However, the circumstances appear to be a little complex so you really shouldn't rely on any guesses as to your legal rights as provided in a forum. You need a lawyer to provide a comprehensive analysis of the circumstances and what has transpired and provide accurate legal advice to you. However its really in the buyer's court to institute proceedings if they really want their deposit back. There is no point you doing it. I would stand your ground and indicate to the buyer that by their conduct they clearly indicated a willingness to be bound by the contract despite not wanting to sign it and as a result you suffered loss in the form of time and money spent training etc etc etc. So you are keeping the deposit. People can't have one foot in and one foot out of a contract so they can exit if it doesn't turn out the way that they want. If the buyer wants to press it further then seek legal advice to defend the matter.
     
  3. Baxter007

    Baxter007 Active Member

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    Much appreciated.
    Person has said they will get legal action, which we are happy for them to do first but in the mean time is continuing to send nasty emails with personal attacks about family members and personal circumstances. We will keep these emails and document any phone conversations, even though we are not responding to their demands and accusations.
     

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