The words deposit and advance seem so similar, but in the legal field they have a big difference
These words are usually used when signing contracts, such as a real estate contract🏗📄
Deposit💵- it is the amount of money that the buyer gives to the seller for further payments, and is a confirmation of fulfillment of obligations.
The deposit must be specified in an additional agreement of the contract. concluding the main contract or simultaneously with it. Without the main contract, the deposit is invalid😱
The deposit can be used as a confirmation of the fact of fulfillment of obligations or as a future payment under the contract, as well as as an incentive for the parties to fulfill their obligations.😎
Advance💴 – it is a prepayment by which the buyer confirms his intention to execute the transaction.
The advance is part of the principal payment, but does not guarantee the final execution of the transaction right now. He can only confirm the conclusion of the agreement in the future. You may not transfer the advance by written or oral agreement.
💰The main difference between an advance and a deposit is that the deposit cannot be transferred. If the contract is not concluded, the advance can be returned to the buyer, in contrast to the deposit. If the contract is not concluded on the initiative of the seller, he must return the deposit in double amount.
🙌🏻So, with a deposit you confirm the already existing monetary obligation, and you transfer the advance to the account of future payments.
To understand what is better to choose, you need to start from the situation, Yurisvest💚⚖️ will help to choose the best decision, and also will consult and will help to make the qualitative contract.