Mr. Nguyen Huu Ta needs advice: In April 2022, I deposited 400 million VND to buy a 170m2 plot of land from Mr. A (worth 800 million VND), including a level 4 house of 80m2 . I promised to pay him the remaining 400 million VND when the transfer documents were completed. In June 2022, Mr. A said that his younger brother did not agree to sell the land ( 170m2 ) and requested to cancel the contract for an unexpected reason. I would like to ask: Does Mr. A have to compensate me for the deposit? What should I do?
His question was advised by lawyer Nguyen Van Tang (Ben Tre Bar Association) as follows:
- According to the information he provided, in April 2022, he deposited 400 million VND to buy land from Mr. A; in June 2022, Mr. A requested to cancel the contract for unexpected reasons.
According to the provisions of Article 328 of the 2015 Civil Code:
“1. A deposit is an act in which one party (hereinafter referred to as the depositor) delivers to the other party (hereinafter referred to as the deposit recipient) a sum of money or precious metals, gemstones or other valuables (hereinafter referred to as the deposited property) for a period of time to secure the conclusion or performance of a contract.
2. In case the contract is concluded or performed, the deposit shall be returned to the depositor or deducted to fulfill the payment obligation; if the depositor refuses to conclude or perform the contract, the deposit shall belong to the deposit recipient; if the deposit recipient refuses to conclude or perform the contract, the deposit shall be returned to the depositor and an amount of money equivalent to the value of the deposit, unless otherwise agreed.
However, he did not say whether the deposit was made in writing or not. Between him and Mr. A, there was an agreement on the terms that if one of the two people arbitrarily changed their mind, how would the deposit be handled? Therefore, the lawyer will divide into 2 cases for consultation, specifically as follows:
- If the deposit has a written agreement, including the terms of settlement of the deposit and compensation, the return of the deposit and compensation for the deposit shall be carried out according to the agreement of the two parties.
- If the two parties do not have an agreement on the terms of deposit settlement and deposit compensation: Based on Clause 2, Article 328 of the Civil Code “… if the deposit recipient refuses to enter into or perform the contract, he/she must return the deposit to the depositor and an amount of money equivalent to the value of the deposit…”.
So if Mr. A (the deposit recipient) refuses to perform the contract, he must return to him (the depositor) the deposit of 400 million VND and an amount of money equivalent to the value of the deposit of 400 million VND.
In your case, you can meet Mr. A to negotiate a settlement first. If you cannot negotiate, you can file a lawsuit at the district court (where Mr. A resides) to request Mr. A to return the deposit of 400 million VND and compensate you for the deposit.
H. Tram (performed)
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