I have just looked at my contract and realized that the seller of out contract for deed has defaulted by charging me interest on my "on-time" payments, when in our contract, it states that NO INTETREST will be taken out for "on-time" payments, and that the only time Interest will be taken out is when we are late paying the payments. He's in default now, correct, because he has taken Interest out when we have been on time with payments.
:confused:

He is not in default. Default would be the failure to pay on time. He just over charged you and apparently you were not aware of the no interest clause until now. Maybe he was no more aware than you. I think that both of you have made mistakes so you need to talk together about resolving the misunderstanding you both had.

Agreed, he is in violation of the terms, not in default.

You may ask him for the refund of thse funds and if he refuses you may use the terms of the contract to sue him in court for the money