53.4 Drafting points—deposit clausesIf a clause allows for an advance payment, the contract drafter may need to consider the following:(a) What is the purpose of the advance payment? Is it a means to show that the buyer of the goods or services is in earnest, or to enable the supplier to pay for materials to be used by it in the performance of the contract (so the payment is in reality a part-payment1)?(b) Will the advance payment be retained by the supplier if there is a default by the buyer? In what circumstances will it be retained?
If a clause allows for an advance payment, the contract drafter may need to consider the following:
What is the purpose of the advance payment? Is it a means to show that the buyer of the goods or services is in earnest, or to enable the supplier to pay for materials to be used by it in the performance of the contract (so the payment is in reality a part-payment1)?
Will the advance payment be retained by the supplier if there is a default by the buyer? In what circumstances will it be retained?
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
0330 161 1234