It is vital to be able to differentiate between different types of payments you may be asked to make for products and services from time to time, to ensure you are not taken by surprise by hidden or unbudgeted costs.
For example:-
Deposits are payments made to secure a benefit or service at the expense of others, and are usually non refundable. A typical example of this is a deposit of the agreed purchase paid on a property transaction at point of exchange which removes the property from the market while relevant searches are made. If a purchaser then pulls out of the purchase without good reason, then usually contract provides for the deposit to be kept by the seller. Deposits can be represented in such percentage terms or be a fixed fee.
Payments on account, on the other hand, are up front payments made, usually against invoice carrying VAT to the extent lawfully required, on account of the agreed cost of services or a product to be received, as a stated condition to work comprising the service or product being commenced. If work (which could, for example, be plumbing or restoration) for reasons outside the control of the purchaser is then never commenced or only completed to a part value of the payment on account made, then a purchaser can very often as a matter of contract require the return of all or some of the payment on account made. This may be the case even if a payment on account is described as being "non refundable" because the question is more about the substance of the payment arrangements, as opposed to any particular label given to it (i.e. all the circumstances are considered as a whole).
Penalties are payments described as being required if a person, for example, does not go through with a purchase for some reason, usually justified by the resource cost loss to the provider. The good news is that such provisions are unenforceable in many legal jurisdictions unless they represent a genuine and justifiable pre-estimate of the loss likely to be suffered by the service or product provider brought clearly to the attention of the purchaser before contracts are entered or work starts.
Great care should therefore be taken when reviewing any sales literature that refers to up front or other payments in general to make sure they are fully understood.
And needless to say, wherever possible pay via secure bank transfer and secure relevant receipts for evidential purposes in case of any subsequent dispute.
Always take specialist advice in advance if you are unsure!
If you would like to share your experiences in relation to the subject matter of this post, then please as always comment or reach out to us via our "Contact" page.
For further information in this regard, please consult our "Legal Notices" page.
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LouLoU™&MikeyM™😊😍😎🧡💛💕 xxxx