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Does a contractor have a right to refuse to return a down payment when a project is cancelled.

GeorgiaPayment Disputes

I hired a contractor to build a deck on my home. I paid a 50% deposit. Within 2 days, my situation changed and I needed to cancel the project. The contractor is refusing to return the deposit. No materials had been ordered. There is no cancellation clause of any kind in our general agreement. Can he refuse to return the deposit?

1 reply

Feb 5, 2021

Generally speaking when a contract is breached or terminated prior to completion, the non-breaching/terminating party is only entitled to the benefit of the bargain (i.e. the expenses and profit on the work performed). However, specific contract language can impact whether some or all of the deposit is non-refundable.

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