contract-law securities
Are claims that Elon Musk cannot back out of buying Twitter after agreeing to buy before actually doing so valid without a full deposit in escrow?
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<p>Elon Musk must close Twitter deal by end of this week or face trial. (CNN Business, October 24th, 2022)</p>
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<h2>I don’t know, I haven’t read it</h2>
<p>It might require a deposit. It might not.</p>
<p>There is no need for a deposit to make a contract binding.</p>

<p>A contract can specify that a deposit is required before some obligation is effective. Or it can fail to include any such requirement, in whch case no deposit is needed. In some kinds of contract, such as house purchases, a deposit is usual.But even in a transaction where a deposit is usual, it may be omitted from the contract, if the parties so agree.</p>
<p>An option to buy normally gives one party the right to make a specified purchase at a specified price within a specified time. There need not be a deposit, although there could be. There does need to be some consideration to make the contract valid (in a common-law jurisdiction). This is often a purchase price for the <em>option</em>. But it can be small, even nominal, and is separate from any deposit.</p>
<p>A deposit give one party some assurance tht the other party is serious about a transaction. Often it will be forfeited, in whole or in part, if the party giving the deposit fails to proceed without good reason. But that depends on the terms of the contract, and perhaps on specific law that applies to the transaction, particularly in consumer transactions (which any sale of Twitter is surely not).</p>
<p>I knpw of no law that <strong>requires</strong> a deposit for a contract to be binding in any situation, although there could be one I do not know of. Inb commo-law systems there must generally be <strong>some</strong> consideration for a contract to be binding, but this need not take the form of a deposit.</p>
<p>I do not see what the relevance of a &quot;Fraudulent stipulation&quot; mentioned in the question would be.</p>
