What happens if a buyer does not make a deposit in a sales contract?

What happens if a buyer does not make a deposit in a sales contract?

• A. The contract becomes enforceable
• B. The contract may become unenforceable
• C. The buyer loses their right to negotiate
• D. The seller can raise the price

Answer: (B)

If a buyer does not make a deposit in a sales contract, the contract may become unenforceable. A deposit, often referred to as earnest money, serves as a demonstration of the buyer's commitment to the transaction and is typically required to help ensure that they are serious about proceeding with the sale. Without this deposit, the seller may have grounds to question the buyer’s intentions and could potentially consider the contract invalid or unenforceable due to lack of earnestness in following through with the terms. Having a deposit in place establishes a level of security for the seller, while its absence can create a situation where the seller may choose not to honor the agreement, making it difficult to enforce the terms of the contract as originally intended.

If a buyer does not make a deposit in a sales contract, the contract may become unenforceable. A deposit, often referred to as earnest money, serves as a demonstration of the buyer's commitment to the transaction and is typically required to help ensure that they are serious about proceeding with the sale. Without this deposit, the seller may have grounds to question the buyer’s intentions and could potentially consider the contract invalid or unenforceable due to lack of earnestness in following through with the terms.

Having a deposit in place establishes a level of security for the seller, while its absence can create a situation where the seller may choose not to honor the agreement, making it difficult to enforce the terms of the contract as originally intended.