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My daughter (who's a student) put a deposit on a car (private) on Monday on the proviso that her car would be sold by Wednesday, but the deal fell through. She went to update the seller on the situation and get her deposit back. The seller accepted this and said that he would have her deposit for her tomorrow. He called her an hour later saying he has decided that he wasn't going to refund the deposit and that he doesn't have to. What's the law? Can he do this? It seems unfair.

Hi there,
There is no ruling on deposits, but it is a general understanding that a deposit could be lost if the deal fails, unless terms of refund is negotiated beforehand.
If terms of refund had been negotiated, then you have formed an agreement and could be considered a verbal contract that the money would be returned if the sale failed due to the terms of the agreement. So even though in normal circumstances the seller doesn't need to return the deposit, in this case it seems they agreed upon a refund clause and would then be obliged to refund the money. You may need to go to the disputes tribunal and try to claim the money back.