It depends. If you are still in attorney review and or the inspection contingency period, you can cancel the contract.
During attorney review you can cancel a contract without any questions asked.
If you have had your inspection done, are still in the inspection period and can't come to an agreement, you can cancel the contract.
If you are past the contingency deadlines, you can still back out of the deal but you may loose your earnest money and could be held accountable by the sellers.
There are a lot of factors that can get you out of the contract and still get you binder deposit back:
1) Financing Contingencies - if you do not qualify for the loan amount, you can present the letter from the lender indicating so as long as you're within the time specified in the contract.
2) Home Inspection Contingencies
These are not to be taken very lightly. I appreciate your question here on Trulia, but I strongly suggest you consult your Realtor, or if you submitted the offer yourself, consult a Real Estate Attorney to explain the entire process to you. Good luck!