Deposits: At the Intersection of Contract, Restitution, Equity and Statute
Whether a partial payment is recoverable in restitution by a party in breach of contract depends on the classification of the payment as a deposit or a part-payment. A part payment may be recoverable in unjust enrichment if the contract is terminated and a vitiating factor can be found (usually tota...
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
2013
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| Online Access: | https://ink.library.smu.edu.sg/yph_lect/1 https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1000&context=yph_lect |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | Whether a partial payment is recoverable in restitution by a party in breach of contract depends on the classification of the payment as a deposit or a part-payment. A part payment may be recoverable in unjust enrichment if the contract is terminated and a vitiating factor can be found (usually total failure of consideration in this context), and subject to a counterclaim for damages. However, a deposit is intended to be earnest for performance and will not be recoverable, at least generally. Six questions will be considered: (1) Is the penalty rule applicable to a deposit? (2) If not, is the deposit subject to any other common law control? (3) Is equitable relief against forfeiture applicable? (4) Does a stipulation of “non-refundable” payment describe the essential feature of a deposit as generally not subject to a restitutionary claim, or does it purport to exclude such a claim completely? (5) If the latter, is the exclusion effective? (6) If it is, does it reveal a statutory gap in the regulation of exclusion clauses? |
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