Consumers are often asked to pay a deposit when purchasing certain products or services, such as when ordering a product from a shop or when hiring someone to do a particular job.
As soon as a deposit is paid, consumers enter a legally binding contract with the trader, and rights and responsibilities are created for both parties to the contract.
On one hand, the consumer is committed to pay the agreed price when the product or service is provided, and on the other hand, the trader must provide the product or service as stipulated in the contract of sale.
Since after paying a deposit, consumers cannot change their mind and are bound to observe the sales agreement, consumers are advised to make informed purchase choices. Shopping around and comparing sales offers of different sellers is very important. Knowing the seller and their reputation is also recommended.
Consumers should also make sure that all the details related to the purchase are written down and these should include a clear description of the product or service ordered, the agreed price, the amount of deposit paid and the balance due. The date when the product or service will be supplied must also be clearly written in the sales agreement.
Written confirmation of what has been agreed becomes particularly important if, for example, the product delivered is not exactly what the consumer ordered. While a contract that has been agreed verbally is enforceable, in practice, with no written details, consumers may find it hard to successfully argue that they have not received the product or service paid for.
There may be situations where consumers, after paying a deposit, decide they no longer want or need the product or service ordered. In such cases, the seller is not legally required to return the deposit paid and thus consumers risk losing their money. This unless there is a clause in the sales contract that allows consumers to change their mind and cancel the purchase. If there is no such clause, then usually it is up to the seller to decide whether to refund the deposit.
Consumers may claim their deposit back in situations where the seller does not adhere to the terms of the contract- Odette Vella
Consumers may, however, claim a part refund if the trader’s decision to retain all the deposit paid proves to be a compensation which is disproportionately high to the value of the goods or services purchased or hired.
Consumers may claim their deposit back in situations where the seller does not adhere to the terms of the contract. These situations include cases where the seller is unable to supply the product or service agreed or cannot supply them on the agreed date.
Consumers may also claim compensation for additional expenses incurred as a direct result of the seller’s inability to honour the sales agreement.
Some additional precautions consumers can take before accepting to pay a deposit include ensuring that the amount of deposit paid is reasonable. Consumers should be aware that the amount of deposit is not regulated by any law and hence, this should be negotiated and agreed upon by the two parties. If no agreement is reached, consumers should seriously reconsider whether to proceed with the sale.
Consumers should remember that it is in their best interest to pay the least possible amount of deposit. The reason for this is that they have not yet come into possession of the product or received the service and hence, problems may crop up.
One of these possible problems is that the trader may go out of business before providing the good or service. In such situations, it would be difficult, if not impossible, for the consumer to either get the good/service or their money back.
Usually when a seller closes a business, the trader would owe money to several people, so the consumers’ claim would be one of many. There are also rules for the priority to be given to the various debts and consumer claims are low in the order of priority.
There could also be problems with the products ordered; for instance, a different product may be delivered, or it may arrive with missing components.
Consumers should remember that when such problems arise, their strength to negotiate a quick solution often lies in how much money they still owe the trader.
Consumers who experience problems with deposits or feel that their deposit has been unfairly retained by the seller, may contact the Office for Consumer Affairs for further information and assistance.
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