What do courts have to consider when deciding whether or not to return a buyer's deposit? asks Kate Chambers
The recent case of Aribisala v St James' Homes (Grosvenor Dock) Ltd [2008] EWHC 456 (Ch), [2008] All ER (D) 201 (Mar) considers the importance of deposits in conveyancing transactions and highlights the significance of the Law of Property Act 1925 (LPA 1925) in relation to the terms upon which a deposit is given.
The buyer's payment of a deposit as part payment of the total purchase price, is taken as a reliable indicator of a willingness to proceed. It is commonly accepted that the buyer is likely to forfeit the deposit if there is a failure to fulfil the contract. The Standard Conditions of Sale (4th Ed) provide that should the buyer fail to complete the seller is entitled to retain the deposit. Additionally, the case of Hall v Burnell [1911] 2 Ch 551, [1911-13] All ER Rep 631 clarified that there need not be any express right in the contract;
