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Dimitry K., Esq.
Dimitry K., Esq., Attorney
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I was given a deposit on the MOU and buyer wanted to purchase

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I was given a deposit on the MOU and buyer wanted to purchase a bigger booth for a show and said he would re-imburse me for the booth. However, the MOU fell through and I want to use part of the MOU deposit to pay me back for that bigger booth that they had me procure. Can I?
Submitted: 3 years ago via LawDepot.
Category: Business Law
Expert:  Dimitry K., Esq. replied 3 years ago.
Thank you for your post.

Just to be clear, you mean you had a memorandum of understanding? If not, what does "MOU" stand for?
Customer: replied 3 years ago.
Yes, memorandum of understanding which stated if could not reach an agreement, the deposit would be refundable. However, in another email, the buyer approved me to purchase a larger booth at a show and said they would re-imburse me for that amount. I purchased the amount and never got re-imbursed, however, I do have the deposit which I would like to apply against their debt.
Expert:  Dimitry K., Esq. replied 3 years ago.
Thank you for your patience.

What exactly did the MOU state in case of default, that it would be refundable back to the seller? When the MOU fell apart you were left with the additional costs, correct?
Customer: replied 3 years ago.
<p>Yes, i was left with 8700 additional costs as well as attorney fees for preparing the contract. The MOU said that if an agreement wasn't met, the deposit was refundable.  Also, the reason the MOU fell through was because the buyers wanted to create a whole new MOU and were not ready to close on the date agreed to in the MOU.  </p><p> </p>
Expert:  Dimitry K., Esq. replied 3 years ago.
Thank you for your follow-up.

In that case you may have grounds to pursue them for an "implied breach of contract", which is an equitable ground that you can claim when there was no legal contractual obligation, but there was enough for you detrimentaly rely on their promise, make an investment with an expectation of a refund, and have them breach the promise. To pursue them for the funds you would have to take them to circuit court since the MOU amount is too high for California small claims courts (the limit is $7,500).

Good luck.

Edited by Dimitry Alexander Kaplun on 1/4/2011 at 7:02 PM EST
Customer: replied 3 years ago.
So give back the deposit and pursue them for an "implied breach of contract"? They are two seperate issues?
Expert:  Dimitry K., Esq. replied 3 years ago.
Thank you for your patience.

I am sorry, I misunderstood--you are still holding the deposit?
Customer: replied 3 years ago.
Yes, still holding the deposit? Do I have grounds to keep it for my additional expenses that they promised to make?
Thanks,
Gary s.
Expert:  Dimitry K., Esq. replied 3 years ago.
Thank you for your follow-up.

If you still have the original contract under which they promise to be bound, that amount that they promised to cover can be held by you as liquidated damages on their end. You cannot hold the full amount, but the amount promised, so long as you have it in writing, can be held.

Good luck.

Edited by Dimitry Alexander Kaplun on 1/6/2011 at 4:45 PM EST
Customer: replied 3 years ago.

Is an email good enough for their promise in writing. I have several emails that were on this subject.

Thanks,

Gary S.

Expert:  Dimitry K., Esq. replied 3 years ago.
Gary,

Yes, an email by itself can be used as a written promise, that if taken and relied upon, can create a contractual obligation. So long as that letter was sent by them, it creates an obligation simply because by sending out the promise, they become the party to be charged.

Good luck.

Edited by Dimitry Alexander Kaplun on 1/6/2011 at 10:30 PM EST
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 38791
Experience: Run my own successful business/contract law practice.
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Dimitry K., Esq.
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Run my own successful business/contract law practice.