Vendor refusing to return deposit after aborted sale

[ummunono]

Hello ladies, I have a court case at the end of the month and desperately need advice! My husband had hoped to open a small café in a train station and had agreed a price with the vendor. He paid him a deposit and they both signed a letter of intent stating that the new lease issued by the landlord (TFL) should match the existing lease for the sale to go forward. After many delays and issues with the landlord's agent, they finally issued a new lease that had similar terms to that of the vendor, except for one point: it asked for 1year rent deposit instead of 3 months. We had to cancel the sale as we could not afford this money: we couldn't make it work with our business plan. The vendor then stopped answering our calls and is refusing the return the deposit, saying that we cancelled the sale and thus he is entitled to keep the deposit. He took a solicitor to prepare his defense, and my husband is representing himself as we can't afford one, so I am getting worried! Any experience of this, any advice? I am looking for similar cases on Lexis to be used as example, but I don't have any legal experience.
Thank you in advance!

[Polyethyl]

If your credit rating wasn't good enough that the landlord felt it necessary to protect themselves with a larger deposit - that is not the cafe owner's fault. If he offered the business sale in good faith - and it isn't his fault that the sale has fallen through. ... then why should he return the money?

[cottoncandy]

what did the letter of intent say about the deposit, if anything?