When consumers agree to pay a deposit upon ordering a product or a service, they commit to finalise the sale at the agreed price. These types of purchases are best concluded in writing and should include a description of the product or service ordered, the final price, the amount of deposit paid, and the agreed date when the product or service will be provided. This agreement should be signed by both consumers and traders.
Once a sale is agreed upon, neither the consumer nor the trader can unilaterally change its terms and conditions. There are, in fact, legal consequences when either the consumer or the trader decide to terminate the sales agreement. If consumers decide to not proceed with the purchase, they may be liable to pay a penalty or may lose the deposit paid. This unless there is a clause in the contract of sale that gives consumers the right to change their mind, cancel the sale and claim a refund of the deposit paid.
If, on the other hand, it is the service provider who is unable to provide the goods or services ordered as per the contract of sale’s terms and conditions, consumers may seek the cancellation of the sales contract and request full refund of the money paid. This is also the case if the price agreed upon is changed by the seller or if the trader is unable to provide the goods or services on the agreed date.
Consumers should remember that there is no legislation that dictates the amount of deposit
When requested to pay a deposit, consumers should remember that there is no legislation that dictates the amount of deposit, but it is a matter of agreement between the buyer and the seller. While it is usually the seller who proposes the amount of deposit to be paid, if consumers believe that the suggested amount is unreasonable, they should try and renegotiate a different amount. If the trader refuses, consumers are free to reconsider whether they should proceed with the purchase.
Since a deposit is paid on a product or service which the consumer has not yet received or consumed, it is in the best interest of consumers to pay the least possible amount as deposit. Should a problem arise with a product or service ordered, consumers’ chances of obtaining a swift and hassle-free remedy may depend on how much money they still owe to the trader.
Another possible problem is that the seller to whom the deposit was paid goes out of business. If this happens, it would be difficult for consumers to get the item or their deposit back. When a company is liquidated, consumers become creditors but other creditors such as employees, banks and other suppliers are likely to take priority in terms of payments.
Disputes with traders concerning deposits may be referred to the Office for Consumer Affairs for further information and assistance. This office may be contacted either via e-mail on info@mccaa.org.mt, by phone on 8007 4400, or by sending a private message on the authority’s Facebook page, MCCAA.
Odette Vella, Director, Information and Research Directorate