Aribisala v St James’ Homes (Grosvenor Dock) Ltd [2008] EWHC 456 (Ch), [2008] All ER (D) 201 (Mar)
The only real scope for the operation of s 49(2) of the Law of Property Act 1925 (ordering the return of a deposit) is when the purchaser is the party unable to perform the contract: where it is the vendor who is unable to perform the contract, the purchaser will have a legal right to the return of the deposit.
What needs to be looked at is how close the purchaser came to performing the contract, what alternatives he was able to propose to the vendor and how advantageous they would be compared with actual performance of the contractual terms. Where the purchaser simply could not perform the contract or offer any such alternative, then it would be exceptional for the deposit to be returned.
