Upon ordering a product or service, we are often asked to pay a deposit. The amount asked for usually varies. When we think it is too high, compared with the total price, we should not be afraid to renegotiate it with the seller.
Other times we are only asked to pay a small amount as a deposit and this may be risky. This may be a marketing tactic to encourage us to sign an order without reflecting on the kind of purchase we are making.
What we often do not realise is that as soon as we pay a deposit, we enter into a legal contract whereby on one hand sellers commit themselves to provide us with the product or service ordered at the price and date agreed on; on the other the consumer is committed to purchase the product or service.
Should we change our mind, there may be unpleasant legal consequences to face. First and foremost, the deposit paid, unless agreed otherwise, may be lost. It does not matter how good our reasons are. Even if, for instance, we have lost our job and are not in a position to continue with the purchase, we cannot legally request our deposit back.
In actual fact, the trader is legally entitled to keep our deposit should we decide not to go ahead with the purchase. Losing the deposit is not the only risk. When we change our mind, we may also be obliged to continue with the purchase. Should we, however, agree otherwise with the seller, such agreement is best put in writing.
But if the product is ordered through a distant means of communication, such as by telephone, through mail order or via the internet, then the law is different. In such cases, we are entitled to a 15-day cancellation period from the day after we receive the goods.
The trader should also provide us with further explanations, such as information on our right to cancel and details on how goods may be returned and the money refunded. However, should we exercise our right to cancel, we may have to pay the delivery costs to return the goods back to the seller.
It is always advisable to be sure before booking or ordering a product or service. Any shopping around should be done before paying deposits. In cases of products we won't be using for a while, there is no need to order them years before. New models may be created, which will provide us with a vaster range of products to choose from.
There is also the risk that circumstances change and our needs may change too. Furthermore, the seller may go out of business. If this happens, we may have considerable difficulty in getting either the goods or our money back. Usually, in such situations, the seller owes money to a number of people, so our claim will be just one of many. There are also rules for the priority to be given to the various debts in the case of the business going into liquidation.
There could also be problems with the actual order, such as, for instance, a different product is delivered or arrives with missing components. As consumers, we should bear in mind that when this happens, the amount of our strength very often depends on how much money we still owe the supplier. Hence, the advice is to cling tight to our money until what we have ordered is delivered and carefully checked out.
In cases where the trader does not honour his part of the contract by, for instance, failing to provide the goods as agreed or on the agreed date, or if the goods are delivered faulty, the trader is liable to refund the deposit. The trader may also be liable to any other reasonable costs we may have incurred as a result of the seller's breach of contract.
Especially with delivery dates, it is in our best interest that the agreed date is clearly written on the contract of sale. Other important information to be included are the trader's contact details and a detailed description of the goods or services ordered.
customer@timesofmalta.com
odette.vella@gov.mt
Ms Vella is senior information officer, Consumer and Competition Division.