Refundable deposit
A refundable deposit is money paid in advance to secure a booking, rental, purchase or service that is returned, fully or partly, if the agreed conditions are met. The contract says when it is refunded, what can be deducted and how fast it must be paid back.
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Sample Refundable deposit clauses
Pursuant to the Tai He Agreements, Tai He agreed to invest a minimum of $35 million in the IPO subject to the Company making a $7.0 million refundable deposit (the “Refundable Deposit”) and advancing a $3.0 million service fee for investor relations and other services (together, the “Services”) payable to Tai He. The Company, its affiliates and individual shareholders paid the $7.0 million Refundable Deposit and $3.0 million service fee to Tai He in several installments from January 27, 2022 to March 11, 2022. After March 11, 2022, the Company has made no other payments to, nor had any direct interaction with, Tai He, and, in actuality, the Company never directly communicated with Tai He, only communicating about Tai He and the Tai He Agreements through Shengang.
(a)REFUNDABLE DEPOSIT: As a portion of the Purchase Price and within two (2) business days of acceptance of this Offer, the sum of Twenty Five Thousand Dollars ($25,000) (the “Refundable Deposit”), by way of a cheque or bank draft shall be paid to Colliers Macaulay Nicolls Inc., in trust, to be held as contemplated in this Offer;
By September 28th, 2023, Purchaser shall make an additional non-refundable deposit payment to in the amount of USD $50,000.00, to bring total non-refundable deposit prior to closing and delivery to $300,000.00. Payment shall be made in United States Dollars and shall be made by wire transfer, certified check or bank cashier’s check and held in escrow by AIC Title Company.
Source
Taronis Fuels, Inc.2.3.1. First Order. Within two (2) business days of the Initial Order becoming a Binding Commitment, the Purchaser will make a non-refundable deposit for the purchase of five (5) Units to Taronis in an amount equal to twenty-five percent (25%) of the Unit Purchase Price per Unit, which amount is $3,515,625 (“First Order”).
Source
Taronis Fuels, Inc.2.3.2. Second Order. Within ninety (90) days of the delivery of the Units comprising the First Order into the Territory, the Purchaser will make a second non-refundable deposit for the purchase of five (5) additional Units to Taronis in an amount equal to twenty-five percent (25%) of the Unit Purchase Price per Unit, which amount is $3,515,625 (“Second Order”).
(i) Not later than five (5) Business Days after the Effective Date, Buyer shall deposit with Westcor Land Title Insurance Company, Inc., 600 West Germantown Pike, Ste. 450, Plymouth Meeting, PA 19462, Attn: Anthony Spangler, 321-214-6860, [email protected] (the “Escrow Holder”) by wire transfer in immediately available good funds in United States dollars (“Cash”) the amount of ELEVEN MILLION FOUR HUNDRED TWENTY-SEVEN THOUSAND FOUR HUNDRED EIGHTY AND NO/DOLLARS ($11,427,480.00) (the “Deposit”), of which, TWO MILLION EIGHT HUNDRED SIXTEEN THOUSAND SIX HUNDRED FORTY-THREE AND 53/100 DOLLARS ($2,816,643.53) (the “Non-Refundable Deposit”) shall be non-refundable to Buyer other than in the event of (i) a Seller Default which has not been timely cured pursuant to and in accordance with Section 14(b) or (ii) the failure of the Loan Assumption Conditions to be satisfied as a result of any reason other than a Buyer’s default under this Agreement which has not been timely cured in accordance with Section 14(a), in either of which events, the Deposit (including the Non-Refundable Deposit) shall be fully refundable to Buyer. In the event Buyer fails to deliver the Deposit in accordance with the terms herein, then this Agreement shall automatically be deemed null and void and of no further effect without the necessity of confirmation by either party, except Buyer and Sellers shall have such rights and obligations as are set forth herein to survive termination hereof.
Source
Pelican Delivers, Inc.2.1. Non-Refundable Deposit. Buyer shall make a SEVENTY FIVE JHOUSAND DOLLAR AND 00/100 ($75,000.00) non-refundable deposit by wire and/or certified funds no later than October 30th, 2018.
The Deposit shall be entirely non-refundable.
Buyer shall wire funds or bring certified check as follows:
Chase Bank
1955 156th Avenue NE Bellevue, Washington 98007
Dot Corn LLC
Routing:325070760
Account: 676313880
This will leave a balance of THREE HUNDRED FIVE THOUSAND DOLLARS AND 00/100 ($305,000.00).
Source
ALEXANDER TECH CORPOn June 10, 2021, A9 Technologies made a $45,000 non-refundable deposit towards the stock purchase, and on July 9, 2021, A9 Technologies made an additional non-refundable deposit of $13,850 towards amounts paid by the former President on behalf of the Company subsequent to the date of the agreement.
The Purchase Price shall be paid and satisfied as follows:
(a) as to $1,206,418.31 (the “Deposit Amount”), by payment of the Deposit Amount in one or more installments by the Purchaser to the Vendor, such Deposit Amount to be a non-refundable deposit against the Purchase Price;
(b) unless the transaction contemplated by this Agreement shall be completed before payment of such amount, by payment of $700,000 (the “Extension Amount”) by the Purchaser to the Vendor on or before October 10, 2019, such Extension Amount to be a non-refundable deposit against the Purchase Price;
Source
iQSTEL Inc (IQST)(b) Non-Refundable Good Faith Deposit. Upon the execution of this Agreement, Buyer agrees to deposit by wire transfer of immediately available funds into the trust account of The Corporate Law Firm (the “Escrow Agent”) an amount equal to One Million Five Hundred Thousand Dollars and 00/100 (US $1,500,000.00)(the “Non-Refundable Deposit”) to evidence Buyer’s good faith intention to purchase the Shares in accordance with the provisions hereof. Buyer acknowledges and agrees that (i) the Non-Refundable Deposit is non-refundable, and (ii) if (A) the Closing does not occur on or before April 30, 2024, or (B) Seller terminates this Agreement pursuant to Section 9(a)(iii) hereof, the Non-Refundable Deposit shall immediately be disbursed by the Escrow Agent to Seller without any Liability on the part of Seller therefor. At the Closing, the Non-Refundable Deposit shall be credited against the Purchase Price. Buyer further acknowledges and agrees that the Escrow Agent represents Seller in this transaction and waives any and all conflicts of interest.
Source
FDCTECH, INC. (FDCT)Upon receipt of the non-refundable deposit by the Seller from the Buyer, for 30 days from the date of signing this Term Sheet, none of the Company, its shareholders, its directors, or its officers will conduct or solicit any discussions or negotiations with any third party regarding any sale of a material number of shares in the Company or any sale of a material part of the business and assets of the Company, unless approved in advance by the Buyer in writing.
What is a refundable deposit?
A refundable deposit is money paid upfront that the payer gets back, in full or in part, if the conditions in the contract are met. It secures a booking, a rental, a purchase or a service, and protects the other side against damage, no-shows or unpaid bills, without becoming its money for good.
Common examples are rental security deposits, equipment and vehicle rental deposits, venue and hotel booking deposits, and earnest money in a home purchase.
What does refundable deposit mean?
It means the deposit is not a payment for the goods or service. It is held as security and returned once the reason for it is gone: the rental ends without damage, the booking takes place, or the deal closes or falls through for an allowed reason. Some contracts apply it to the final bill instead of paying it back.
Refundable vs. non-refundable deposits
| Refundable deposit | Non-refundable deposit | |
|---|---|---|
| Returned when | The conditions are met | Never, or only if the other side cancels |
| Purpose | Security against loss or damage | Compensation for reserving time, stock or a date |
| Typical use | Rentals, equipment, utilities | Weddings and events, custom orders, some bookings |
| Deductions | Only those the contract and law allow | Usually kept in full |
A deposit that is “partially refundable” combines both: a fixed part is kept, the rest is returned.
Are deposits refundable by law?
It depends on the type of deposit and where you are:
- Security deposits for housing: in the US, almost every state requires landlords to return the deposit, minus itemized deductions, within a set deadline, for example 21 days in California. In Germany, a residential security deposit is capped at three months’ rent without utilities (§ 551 BGB).
- Earnest money: usually refundable if the buyer withdraws under a contingency in the purchase contract, such as financing or inspection, and forfeited otherwise.
- Online and distance purchases in the EU: consumers usually have 14 days to withdraw, and the seller must refund all payments, including deposits, within 14 days. Hotel, car rental and event bookings for a set date are exempt.
- Non-refundable deposits: generally allowed if the contract says so clearly, but a court can treat a deposit that is far larger than the real loss as an unenforceable penalty.
What a refundable deposit clause should include
- Amount and purpose: how much and what it secures.
- Conditions for refund: what the payer must do to get it back.
- Allowed deductions: damage, unpaid fees or cleaning, with an itemized statement.
- Timing: how many days after the end date the refund is paid.
- Holding: whether it is kept in a separate account and whether interest is paid.
- Forfeiture: when the payer loses it, linked to a forfeiture of deposit clause if needed.
Refundable deposit clause example
Sample clause: Refundable deposit
Add this clause to a contract, send it and get it signed in fynk.
Use it in fynk for freeHow to keep track of deposits
Deposits are easy to forget once a contract runs, until the refund is late and the other side complains. In fynk, the deposit amount and refund deadline are fields in the contract, reminders go out when the end date comes, and the dashboard lists every open deposit.
Which contracts contain a refundable deposit?
Leases and rental agreements, equipment and vehicle rentals, event and venue bookings, service agreements, and purchase contracts. These free templates include a deposit clause:
Free templates with this clause
Cleaning services agreement template for B2BThe client pays a deposit to show it can fulfill the contract, fully refunded within a set period after the agreement expires.
Use the free template
Boat sale agreement template (vessel purchase contract)The buyer pays a non-refundable deposit by wire transfer when both parties sign the main terms summary.
Use the free template
Related clauses
- Security deposit A security deposit clause outlines the amount of money a tenant must pay to the landlord before moving in, which serves as protection against potential damages beyond normal wear and tear or unpaid rent. This deposit is typically refundable at the end of the lease term, provided the tenant meets all the conditions of the contract.
- Good faith deposit A good faith deposit is an initial sum paid by a buyer to demonstrate their genuine intent to complete a transaction and secure the terms of a contract. This deposit is typically credited towards the total purchase price upon successful completion of the agreement or may be forfeited if the buyer fails to fulfill their obligations.
- Forfeiture of deposit A forfeiture of deposit clause stipulates that if a party fails to fulfill its contractual obligations, any deposit made will be forfeited as compensation to the other party. This clause acts as a financial deterrent, ensuring compliance and providing a remedy for breach of contract.
- No refunds A no refund policy says that once a customer has paid, they cannot get their money back, for example because they changed their mind. It is legal in many cases if the customer sees it before buying, but it cannot override consumer rights such as refunds for faulty goods or legal cooling-off periods.
Frequently asked questions
No. A deposit is refundable only if the contract or the law says so. Rental security deposits must usually be returned minus lawful deductions; booking deposits marked non-refundable usually are not.
As long as the contract or law allows. Many contracts set 7 to 30 days, and US state laws on rental deposits usually set 14 to 60 days after the tenant moves out, most often 30.
A deposit is security that may come back. A down payment is a first part of the price and is credited to the purchase, so it is usually only returned if the deal is cancelled for a reason the contract allows.
Only for the reasons the contract allows, such as damage or unpaid fees, and it should give an itemized list. Keeping it without a valid reason is a breach of contract.
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