Read your contract and consult with your realtor or if you don't have one see an attorney.
The standard form PA contract includes several provisions for either the buyer or seller too terminate for cause. Under normal circumstances termination for cause includes a pre agreed condition to refund the deposit money to the buyer. However Termination of the contract and Release of the deposit are 2 different events. Termination is a unilateral event thhat can be initiated by either party. Release is a bilateral agreement to distribute the money. Distribution can be to either party or shared as long as both parties agree. If they can not agree then the deposit money should remain with the broker until an agreement is reached or ordered by the court or the result of arbitration.
Fran and Mark Redding
Prudential Fox Roach
1010 Stony Hill Road