Deposit is an action performed in many contract transactions, to ensure transparency and proper implementation of commitments between the parties. When the depositor gives the deposit recipient a sum of money or other valuable assets, it will create trust and responsibility in the contract.
The deposit period is usually specified in the contract and can be used to ensure that both parties comply with their commitments. Once the contract is successfully performed, the deposit will be returned or deducted from other fees. In the event that either party fails to comply with the contract, the deposit can be used to compensate the injured party.
In what cases must the seller return the deposit?
Article 328 of the 2015 Civil Code stipulates that in the event of a contract being concluded, if the depositor refuses to enter into or perform the property contract, the property used as a deposit shall belong to the deposit recipient. However, if the deposit recipient refuses to enter into or perform the contract, the depositor shall return all the deposited property and an amount of money equivalent to the value of the deposited property to the depositor (unless otherwise agreed in the deposit contract).
In the case where the subject participating in the contract is an individual who has passed away or a legal entity that has terminated the contract, or the contract is invalid because the subject of the contract is illegal... then the parties will return the deposit and terminate the contract.
In case the deposit recipient does not want to continue performing the contract, it can negotiate with the depositor about returning the deposit and terminating the contract. However, in this case, when the deposit recipient returns the deposit, it may be subject to a deposit penalty.
In the event that both parties do not wish to continue with the contract, they can directly negotiate with each other about the return of the deposit and termination of the contract. However, in this case, the depositor will usually lose the deposit, unless an agreement is reached with the deposit recipient about the return of the deposit.
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