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Contract deposit terms

Legal analysis: The deposit clause in the contract mainly refers to the agreement between the parties to the contract that in order to ensure the full performance of the contract itself, one party will first pay a certain amount of currency to the other party as a guarantee for the main contract. According to the provisions of my country's Contract Law, the deposit shall be agreed upon by both parties in advance. The party that violates the terms of the deposit shall be punished by the deposit penalty. Specifically, the amount of the deposit can be agreed upon by both parties in advance, but it should be noted that the amount of the deposit shall not exceed 20% of the subject matter of the main contract. At the same time, as part of the contract, the deposit terms must be in writing. When both parties formally pay the deposit, the deposit terms will come into effect.

Legal basis: "People's Republic of China and Civil Code"

Article 586 The parties may agree that one party shall pay a deposit to the other party as a guarantee for the creditor's rights. The deposit contract is established when the deposit is actually delivered. The amount of the deposit shall be agreed upon by the parties; however, it shall not exceed 20% of the subject amount of the main contract, and the excess shall not have the effect of a deposit. If the amount of the deposit actually delivered is more or less than the agreed amount, the agreed amount of deposit will be deemed to have been changed.

Article 587: If the debtor performs its debt, the deposit shall be used as the price or be recovered. If the party who paid the deposit fails to perform its debts or performs the debt inconsistently with the agreement, resulting in the failure to achieve the purpose of the contract, it shall have no right to request the return of the deposit; if the party receiving the deposit fails to perform its debts or performs the debt inconsistently with the agreement, resulting in the failure to achieve the purpose of the contract, double the amount of the deposit shall be returned Deposit.

Article 588: If the parties agree on both liquidated damages and a deposit, and one party breaches the contract, the other party may choose to apply the liquidated damages or deposit terms. If the deposit is insufficient to cover the losses caused by one party's breach of contract, the other party may request compensation for losses exceeding the amount of the deposit.