In everyday life, we are used to calling a deposit a down payment. But if you look from the point of view of the Civil Code, the term "deposit" has a broader meaning. In this regard, it is difficult for many people to distinguish it from a pledge or, for example, compensation. In what cases is an agreement on a deposit and how to draw it up correctly, we will tell further.
What is a deposit?
According to the law, a deposit is a preliminary partial payment for a service and goods. In addition, it is still a way of securing an obligation. The deposit is applied when making major transactions: the purchase of real estate, cars, the conclusion of a lease, contract, supply, tenders and auctions, etc. The provision of such a payment indicates that the parties are serious and thus guarantee their solvency.
Rules of Procedure
The law does not contain any restrictions on the size of the deposit. Its amount is determined only at the discretion of the parties. It should be remembered that such a payment can be made exclusively in money. The transfer of promissory notes or bills cannot be considered a deposit.
Naturally, in order to attest to the transfer of a certain amount, a written deposit agreement is mandatory. This is done by issuing a separate document that contains the relevant provisions. If the parties fulfill the contract, the deposit will become one of the payments under the transaction. But if the contract cannot be fulfilled, the deposit is returned.
Conclusion of an agreement
A document on receipt of a deposit is a bilateral transaction that gives rise to certain legal relations. The subject of the agreement and the most important condition is the size of the payment. In general, the rights and obligations are unilateral in nature, but nevertheless, in order to conclude the main contract in the future, the deposit agreement must contain such obligations for the payee:
- accept a certain amount in a particular place;
- issue a receipt on receipt of money;
- depending on the subject of the transaction, other requirements may be assigned to it.
In addition, the recipient of the deposit must subsequently conclude a contract only with a specific person (that is, with the person who provided the deposit). In addition, before concluding such an agreement, the parties should already draw up an agreement, which is provided by a deposit.
Termination of the deposit agreement
One should not confuse such similar at first glance concepts as "deposit" and "advance". The first has a significant difference from the second and it consists in the fact that if the party that provided the deposit is not fulfilled, it loses it. That is, such a payment will remain with the depositor. If the recipient refuses to fulfill the contract of this amount, then there is not only the termination of the deposit agreement, but also payment in double amount.
As for the advance, it does not carry any โpunitiveโ function. In case of failure to fulfill the agreements, the culprit does not lose this amount. Consequently, advance and deposit have different consequences.
At the same time, there may be cases when the termination of the deposit agreement is accompanied by the return of the payment made. So, if the transaction is terminated by agreement of the parties or if it is impossible to execute it at all, then the payment must be returned. These rules generally mean that if any circumstances arise in connection with which the contract cannot be fulfilled, the deposit is returned.
Document Content
This document must contain some mandatory details. We have already indicated that a deposit agreement is only written in writing. The sample of this document does not have any single strict form, but nevertheless such information should be present in it:
- The name of the document (agreement on the transfer of the deposit under the preliminary contract), its date and place of compilation.
- Name and passport data of the parties.
- The basis for making a deposit is also indicated (for example, on account of the concluded preliminary lease or purchase and sale agreement).
- Next, a specific object is indicated, that is, for which a deposit is given (a dwelling, a vehicle, etc.).
- Penalties if one of the parties refuses the transaction (double refund for the payee or non-refund for the person who transferred the deposit).
- Other conditions not contrary to law.
- Signatures of the parties to the agreement.
Errors in the execution of the agreement
Very often, the parties can make various legal errors when drawing up a deposit agreement. Let us dwell on the most common.
Sometimes the persons who draw up such a document indicate that the money is transferred not as a deposit, but as a pledge. This is fundamentally wrong, such a payment cannot be considered a pledge, since this contradicts the concept of a pledge. At the same time, such an agreement cannot be indicative of the transfer of collateral, because there is no direct reference to this.
The second mistake is that the parties enter into a deposit agreement, but the transferred payment is called an advance payment. Due to such a slip, the deposit provisions will not apply. If such mistakes are made, money can be returned, however, in order to achieve this, one often has to spend a lot of time and effort.
Rules for concluding a deposit agreement for certain types of transactions
In general, the rules for preparing a document on transfer of a deposit for different categories of transactions are almost the same. However, for contracts involving real estate, it is more than risky not to conclude an agreement on the transfer of payment as a deposit for the buyer. In addition, improperly prepared document can lead to unpleasant consequences. It is best to transfer a payment and draw up an agreement on the deposit of a land plot, residential or non-residential premises or other real estate with a notary public. It is also important to require, in addition to the agreement, a receipt of payment. This document is kept by the buyer until the transaction is completed.
Subtleties with rental transactions
It is important to attest to the fact of transferring the guarantee payment not only at the conclusion of the contract of sale. Such paper can be drawn up in principle for almost any type of transaction. Unfortunately, many people believe that if they intend to rent an object, then you can not conclude an agreement on a deposit. Renting is also a serious procedure. Especially when it comes, for example, to some non-residential premises. Imagine that you have agreed with the landlord that you will rent a trading pavilion from him. This is very beneficial for you, because it is located in a favorable location, or the rent will be low. But the landlord took it and changed his mind, and the entrepreneur has to look for a new place, losing his income. Therefore, in this case, you need to insist on concluding a deposit agreement, the future employer has every right to do so.
In conclusion
In order to draw up an agreement on a deposit, a number of simple rules should be followed. The fate of the transaction, in fact, depends on the correctness of the design of this document. Also, before transferring the payment, you should agree on all the nuances and get a receipt from the seller about receiving money. A deposit is your reliable guarantee that the contract will be implemented, so do not neglect your legal right.