Deposits, refundable?

arcon5

So lets clear this up before my head explodes...

Are deposits refundable?

Because I was under the impression they are refundable less any deductions made by the seller to cover their costs or any losses from the deposit.. but...

This seems to say otherwise:

http://www.tradingstandards.gov.uk/Kent/factsheets/FS5NEW%20nov07%20refunds.pdf

It is a sign of good faith that you have agreed to make a purchase. If you change your mind for whatever reason a trader DOES NOT HAVE TO GIVE YOU YOUR DEPOSIT BACK.

Now i'm well and truly lost.

hartcjhart

a deposit 'may' not be refundable,it depends on what is written/said at the time of taking it,however as you see in the link that I posted earlier that is how the law stands

s_b

your link says it all
why the confusion?
a deposit is a promise to buy goods or services and is binding on both sides
how would you feel if you bought item a for £100 and left a deposit on it
but on your return to shop item a had been sold to someone else for £120
you would be mad and rightly so and call it breach of contract
now
you go in shop agree to buy item a and leave a deposit
another customer comes in and says to shopkeeper ooh i like that i will give you £120 for it
shop owner says cant as ive taken a deposit on it
this customer then goes never to be seen again
then customer a walks in saying hes changed his mind and wants his deposit back

now reading both sides do you see the problem?
i hope so:)

did i mention advertising costs involved too?
ok i will keep that one for another day

Optimist

It is a general principle in contract law that a deposit can only be subject to forfeiture if it is a genuine estimate of contractual loss. Anything other than that is considered to be a penalty and under English law that would be a unlawful clause.

arcon5

s_b wrote: »

your link says it all
why the confusion?
a deposit is a promise to buy goods or services and is binding on both sides
.........

s b, thank you. The only problem is your reply looks at the moral aspect of it rather than strictly legal.

Whats causing the confusion is this:

Optimist wrote: »

It is a general principle in contract law that a deposit can only be subject to forfeiture if it is a genuine estimate of contractual loss. Anything other than that is considered to be a penalty and under English law that would be a unlawful clause.

Thanks Optimist.

I think I remember reading something about this a while back -- something to do with some EU directive in 2000 or something?


The only problem is the PDF linked to is quite blunt in stating the fact the retailer does not have to refund a deposit and does not go on to discuss this any further (although the file in general seems abit tacky if you ask me) whereas the above referral to contract law seems to state otherwise.


Surely both can't be true?

mo786uk

There is no one single definition of what a deposit is.

Generally speaking if you back out of a deal the seller can keep the money if that was specifically agreed.

Sometimes a deposit is not just used to hold goods, its part payment towards the goodsl iek in that car case eysterday - if there is a breach of contract for the goods then arguably the customer can cancel the contract and get all their money back including the 'deposit'.

hartcjhart

Optimist wrote: »

It is a general principle in contract law that a deposit can only be subject to forfeiture if it is a genuine estimate of contractual loss. Anything other than that is considered to be a penalty and under English law that would be a unlawful clause.

are you a solicitor

fthl

optimist is right, but to add to that a deposit may be refundable, but it will often depend on how big the deposit is and what a seller's losses are. Following a breach of contract a seller can recover their losses.

This means that anyone that says a deposit certainly is or is not refundable is probably wrong unless a lot of facts are given.