Penalties – What is it, definition and concept | 2022

The criminal deposit is an agreement attached to any type of contract that consists of setting a price for the purpose of guarantee. In case of default, they act as an indemnity for the seller.

These deposits seek to ensure compliance with the main obligation, that is, they function as a guarantee. If the debtor fails to fulfill the obligation or fulfills it defectively, these deposits replace the compensation for damages that the creditor may request.

These deposits can only be required when the breach is due to the debtor and not due to an act of God.

The creditor does not have to prove the damage or quantify it, he directly keeps the money given as criminal deposits.

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For example, if the debtor pays later, the creditor will keep the criminal deposit.

Characteristics of criminal deposits

The main characteristics of these arras are:

  • They have a conventional origin, this means that they are not mandatory to be included in a contract, but will only be included in the clauses if there is the will of the parties.
  • If it is not clear whether the money that is advanced from the total price of the thing is as a deposit or as an advance payment of the price, the interpretation that it is an advance payment of the price prevails.
  • The existence of these criminal deposits must be expressly stated in the contract.
  • They fulfill an accessory function to the main obligation.
  • Although they are very characteristic of the sale, they can occur in other types of contracts.
  • It usually consists of money.
  • Usually, from the moment the criminal deposit is agreed, the aim is to guarantee compliance with the obligation.
  • Penalties can be established in an act other than the main contract, even after signing the contract containing the main obligation. For example, a person signs a contract of sale without stipulating a deposit, but then, at a later time, makes a specific contract of deposit linked to that sale.
  • The penal arras are penal clauses. This means that, even if the obligation is not fulfilled, the deposit does not serve as fulfillment, only as compensation. The debtor must continue to honor its contract with the creditor.
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Different types of arras

There are various types of earnest money, that is, delivering money to the seller to achieve various purposes, in addition to the one studied here: confirmatory earnest money, penitential earnest money.

Penal Deposit Box Page 0001

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