Our customer decided they want out of the signed agreement, and would like the remainder of their $22,500 deposit back. However they are questioning the amount of the remaining deposit, which they believe to be nearly 3k more than actual. After labor, material purchases, tool rentals, design fees, site visits by project manager, etc, we invested roughly $11,500. Question 1: are we obligated to return the remaining deposit (10,997.00)? Question 2: is there a specific deadline to return deposit? We are located in Ohio
The answers to your questions depend entirely on the contract. You should look to that agreement to determine whether the deposit must be returned, how much must be returned, and the deadline.
Ohio does not have any statutes that relate specifically to contracts in this context. Ohio allows parties freedom to contract, and that freedom includes the ability to take deposits, etc. Thus, any court looking into this matter would look at the contract to determine whether there was a breach of the contract, who breached, the damages from that breach, and any damages.
You also may want to consider any potential backlash from keeping the deposit (negative reviews, potential lawsuit, etc.) despite any right to keep the deposit.