WA Should Deposit be Refunded Under Australian Consumer Law?

[cade]

I recently had a buyer agree to purchase an on-site caravan for $8500. They agreed to pay a $4000 deposit and the remaining balance when they returned from a swing away at work on 2nd of July.

I received the deposit on the 9th of June.

On the 30th of June, the buyer sent a message saying they no longer wanted to buy the on-site caravan stating a change in their work situation meant they didn't want to buy it now and they asked for their $4000 deposit to be refunded.

My question is, do I legally have to refund their deposit under Australian Consumer Law?

 

[Rod]

Was it a private sale, or are you in business?

 

[cade]

Private sale

 

[Rod]

Private sales are not covered by the ACL. What you have is a contract agreement with fairly loose terms. I suspect you don't have much in writing. Did you have any agreement with the purchaser about the deposit? If there was no complete understanding/agreement on the deposit, then common law will prevail and probably be against you as the seller and you are seen as the 'writer' of the agreement.

At this stage you can't say 'I am keeping the deposit and you can't have the caravan.' Have they sent anything in writing saying they want out or is it just verbal at this stage?

Generally deposits for 10% or less can be kept so you can possibly keep $850 plus any extra costs you have incurred and return the rest. The law will not allow you to make a windfall on this unless it is explicitly agreed to in written terms.

Alternatively you can sell the caravan to another arms-length buyer (ie not a family member) and refund the difference in price back to the deposit holder less 10% and any costs.

 

[cade]

It is all in text messages.