Re: Comm. Real Estate Purchase-backing out!

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On 6/05/04, Shari wrote:
> I need advice, please. My husband and I started to buy a
> restuarant/building/property/liquor license for $325,000 in
> January 2004. After filling out the paperwork, paying for
> the inspection/appraisal/LCC/lawyer/accountant, etc. We've
> paid out over $8000 plus put $4000 down as a good faith
> deposit. After going to five different banks/lenders, no
> one would approve the $325,000, only $245,000--the
> restaurant is currently showing a loss and as far as we
> could find out does not have a value. The current owners
> refused to adjust their purchase price, so we had to back
> out due to the $80,000 difference. They are refusing to
> return the $4000 good faith deposit back to us and are
> insisting we take it to arbitration, but want us to pay for
> it. What are our legal rights? Can we take them to small
> claims and force them to pay for the legal fees? Why
> should we pay the arbitrator when they haven't met their
> end of the purchase agreement (which is now expired--the
> money is sitting in escrow with the realtor, who will not
> get in the middle). Before the contract expired on 5/29/04,
> they advertised the sale of the restuarant at $300,000. Can
> they legally do that? We need help and can't afford to
> spend any more money on this whole situation--does anyone
> have any advice?

There should have been a contingency clause in the contract
that would have allowed you the right to terminate should you
be unable to secure a loan for the purchase price within a
specific amount of time. Also included should have been a
clause stating the return of any earnest monies (i.e. good
faith deposits) should termination be within the confines of
the contract.

Was there anything to this effect in the contract?