Private party auto sale deposit

What is the name of your state? MD but small claims court is in DC

A few months ago we were trying to sell my husband’s car and a lady was very interested in buying it, but she first had to get her settlement check from her totaled car. This was taking longer than she expected so we requested a deposit in the amount of $500 to hold the car. Numerous times she told us “I definitely want the car and don’t sell it to anyone else.” We did turn down 2 other offers because we had this woman’s check. Turns out her settlement wasn’t for as much as she though so she couldn’t buy the vehicle and she asked for her $$ back. We told her we were keeping the money because she lost us a sale. She claims we didn’t tell her it wasn’t refundable, which is true, but we also didn’t say it was. In the future, I know now to get everything in writing. Anyway she took us to small claims court which was a nightmare. We were there for 5 hours this morning and got as far as mediation (which is required before trial in DC at least). She spouted off a bunch of lies but we offered to give her half her money back (which I didn’t want to do because I feel we are in the right here) but the mediator said if it went to court and we lost, we would have a judgment against us which would affect our credit (I have perfect credit and really don’t want it marred). But she turned down the offer so we are going to trial March 10. My question is…how do I find out the laws governing such transactions? Because if I find there is no way we can win, I will save myself another day in court and having the judgment on my record. But if I have a 50/50 shot of winning, I want to fight. We live in MD but the court was in DC so I guess I need to find out the DC laws for private party car sales? Any suggestions as to the best place to search? Also, do you have any idea how much a judgment like that will affect my credit? We would obviously pay it immediately if we lost but I understand it still affects credit?

Any advice as to whether you think we have a shot at winning or where I can look to find these laws would be appreciated. My online searches thus far have produced nothing.

Thanks very much

You would do well to pay her .

The mediator already told you what your odds are .

Next time get payment in full , and give and keep receipts .

The mediator doesn't know how the judge would rule but was telling me what would happen if he did not rule in my favor.

elliebean said:

The mediator doesn't know how the judge would rule but was telling me what would happen if he did not rule in my favor.

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I can not tell you the outcome either .

You want to take your chances , it's your choice .

Normally , two people making a deal requires both to get something out of it .

The buyer here backed out , and did not receive anything for the money they paid you .

elliebean said:

My question is…how do I find out the laws governing such transactions?

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You won't find any specific statutes covering this as it is simply a matter of common 'contract' law.

A 'deposit' is paid by a buyer, in order to protect their right to purchase and is a condition of the agreement. If the buyer breaches the agreement (by not purchasing), they lose their 'deposit'.

Because if I find there is no way we can win, I will save myself another day in court and having the judgment on my record. But if I have a 50/50 shot of winning, I want to fight.

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In my opinion, even absent a contract clause of loss, you have at least a 50% chance (and likely much higher) chance of winning in this case. However, you will have to do your homework.

First, do NOT call it a 'deposit'. Since it was paid in return for a contractual obligation, you need to call it as it is.... 'earnest money'.

earnest payment
n. a deposit paid to demonstrate commitment and to bind a contract, with the remainder due at a particular time. If the contract is breached by failure to pay, then the earnest payment is kept by the recipient as pre-determined (liquidated) or committed damages.

Go to court with THAT term in mind and use it ONLY. Then, argue that you lost other sales, time (showing to other buyers), etc., anything that you can show that caused you 'damages'...
At the very least, you need to start considering the THREAT to the 'buyer' that you will consider suing HER for breach of contract!!

Questions that will likely affect any outcome in litigation... Did you eventually sell the vehicle??? And if so, was it for more, less or the same as you agreement with the 'breached buyer'??