What is the Deposit
The Deposit is one of the ways to ensure fulfillment of obligations. Under the Deposit should understand the amount of money that is transferred from one side to the other as proof of the conclusion of the future contract and its proper execution. As a rule, most of the Deposit used in relation to transactions with real estate. For example, if the buyer wants to buy an apartment, he can give the seller a Deposit. Then for the buyer it will be a kind of a guarantee that the seller of the apartment to anyone else do not sell.
Conversely, for the seller the Deposit plays the role of insurance in the event that if the buyer suddenly for some reason refuses to deal. In addition to the method of securing obligations, the Deposit is part payment under the main contract because its amount is taken into account by the parties in further calculations. In the legislation of other countries, the Deposit can play a slightly different function.
Consequences of non-performance of the obligation secured by the Deposit, are as follows. When the rejection of a contract or its execution, followed from the party that gave the Deposit, it is fully retained by the company. If similar violations of the guilty party which received the Deposit, she must return double the amount. In addition, unless otherwise provided in the contract, the guilty party must also indemnify for the losses minus the amount of the Deposit.
It should be remembered that the contract regarding the payment of a Deposit, regardless of its amount, must be made in writing (simple or notarial) form. At the same time it must be stated that the amount paid is a Deposit. Otherwise, such funds may be considered by the court in advance.
The difference from the Deposit of advance
The law contains no clear definition of "advance". However, between the Deposit and upfront there are a few differences. First, and foremost, is that the Deposit is always paid by the party prior to the conclusion of the main contract. The advance (prepayment) is paid after signing the contract as partial payment for the performed counter-obligation.
In addition, as mentioned above, if the obligation secured by the Deposit is not performed for his parties there are certain negative legal effects (leaving of the Deposit at its disposal or its return in the double size). To advance such standards legislation does not provide.
