What is a deposit fee?

Information is important, that’s why we would like to introduce you to the most important things concerning the deposit fee.
The down payment fee is also called down payment, advance payment or advance payment and serves as a security for supplier and buyer or consumer equally.

What is a deposit fee ?

For larger purchases such as furniture or even a house (from private sellers) often a so-called down payment fee is required.
In these cases, the goods or service have not yet been delivered or rendered.
This consists of a given percentage of the purchase value (usually 10%) and is often referred to as the first installment.
The further instalments are then to be paid in accordance with the agreement or contract.

A brief example:

A living wall costs 1.000,- Euro
The furniture store you trust requires a 10% down payment, that would be 100,- Euro.
After payment the wall will be reserved for you according to the reservation right.
You pay the rest, i.e. 900,- Euro, when you pick up your car.

Deposits are most frequently used for flights or for travel in general, as these are often booked well in advance.
But also so that the risk of insolvency of the travel company is not “passed on” to the traveller.
In Germany, Austria and the EU, the rule applies that a deposit of 20 % may only be exceeded in special exceptions.

Of course, there are also special individual regulations here again.
The provider can arrange for the delivery of the goods or the performance of the service with the payment of the down payment due to retention of title.

Legal basis for the down payment fee

You, as debtor, have the right to a down payment due to NO REQUIREMENT.
This can be agreed as an arrangement for a partial service if the seller or service provider offers this.

ATTENTION!
If the sales contract is cancelled, you have the right to demand this fee back and get a so-called refund.

IMPORTANT!
The deposit fee is not to be confused with the down payment!
This means that part of the service has already been performed, but has not yet been billed for.

For example, a contract for work:
The bricklayer has already erected part of the wall, has already received an agreed payment.
When the wall was finished, this meant an increase in value, i.e. the accounting shows that the worker receives an additional payment to compensate for the actual value.

What does the train by train principle mean?

This principle is a term from the German law of obligations.
It means that the debtor is not necessarily obliged to the creditor, but is only obliged when the creditor has rendered his performance.

This means that only if the debtor (in this case the buyer) has made his down payment and the creditor (seller or service provider) has made his payment is everything legally valid.

This step by step principle extends its rights to the so-called enforcement proceedings (in the case of a claim by a party, due to non-performance), because there proceedings may only be started once the agreement has been fully fulfilled, i.e. payment and performance have been made.

In order to illustrate the subject of the deposit fee a little more, there is a small video, which simply and briefly brings you closer to the most important points.