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In Kuish v. Smith (2010) 181 CA4th 1419 a California appellate court was faced with the issue of whether a deposit became “non-refundable” merely by labeling it as such. The court began by looking at the issue of whether a Buyer’s deposit could properly be considered nonrefundable, even though the purchase contract did not have a liquidated damages clause. Despite Seller’s argument that it was nonrefundable based on the language of their contract, the court held that, absent a valid liquidated damages provision, any contract provision by which money or property is forfeited without regard to the actual damage suffered would be an unenforceable penalty. Because the parties had expressly stipulated that no liquidated damages clause existed in their contract, and Seller suffered no actual damage as a result of Buyer’s breach, the court ruled that Seller’s retention of the $600,000 “nonrefundable” portion of the deposit constituted an invalid forfeiture. Based off of my experience, every state treats the issue of nonrefundable deposits in a different way. Whether or not you will be able to get a refund on your deposit largely depends on whether your state is consumer or business friendly.