Which remedy allows a buyer to reclaim their deposit if the contract is breached?

The remedy that allows a buyer to reclaim their deposit in the event of a breach of contract is rescission. Rescission is a legal remedy that voids the contract and restores the parties to their original positions before the contract was enacted. When a buyer chooses to rescind the contract due to the seller's breach, they are entitled to recover any deposits or payments made, effectively undoing the agreement.

In scenarios where rescission is applicable, it provides a straightforward means for a buyer to recover funds without needing to prove the extent of the losses suffered, as long as the breach justifies the rescission. This contrasts with other remedies such as liquidated damages, which may allow for pre-set compensation but do not facilitate the return of a buyer's deposit directly.

Specific performance, while a valid remedy in certain situations, typically compels the party in breach to fulfill their contractual obligations rather than allowing for the return of deposits. Damages for lost profit focus on compensation for potential earnings lost due to the breach, which does not necessarily equate to the return of funds already deposited.

By allowing a buyer to reclaim their deposit, rescission directly addresses the desire to reverse the transaction and recover funds, making it the appropriate remedy in this situation.