I'm far from being a lawyer, but isn't there an implicit agreement between builder and buyer that is legally enforceable? I haven't heard of any unresolved problems created by a luthier's inability to complete a commission, though it's a good question.
I take a deposit as an act of good faith on both my and the client's part: that the work will be done according to the agreement and that the buyer will follow through with payment upon completion (or at whatever point is agreed upon). I assume that if something prevented me from completing a job, I or my estate would owe the client(s) their deposits in full if not with interest. I also take the deposit as a commitment on the part of the customer, though some people don't seem to think that way. That's the other side of the equation.
When Rob Girdis died a few years ago I completed a guitar for one of his clients and was paid for my work by the client. Since Rob had only taken partial payment, it all worked out fairly. Rob had done the operations that made the guitar one of his; I did only final fitting and finishing. I know that other partially completed instruments were taken by another luthier; I don't know if they were completed or what the financial arrangements were.
Some years ago, I was part of a conversation in which a well-known builder said that he didn't think he should take too many more commissions since he was aging and had a long waiting list. He said that he didn't want to leave too much of a mess to his kids -- which implies that not only he but his heirs too are bound by the commitment. That's the way the luthiers I know and respect work.
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