A deposit is a payment made by a consumer to a supplier indicating an intention to buy the product or service concerned. The deposit amount and the date/s when the balance is to be paid are matters to be agreed between consumer and supplier.

The law does not regulate how much the trader can request as a deposit, and how or when the rest of the payment due should be made.

When a consumer pays a deposit for goods or services, a contract is created, and it is in the interest of both parties that all the terms and conditions of the sale are clearly written down and signed by both parties in such contracts.

For instance, the contracts should clearly state when the balance is to be paid, and if it is going to be paid by installments, how much each payment is to be; when exactly the product is to be delivered or the service is to commence; a detailed and clear description of what is being ordered, and any other conditions relevant to the order placed.

It is always easier to know what your rights and responsibilities are if you have details of the contract in writing; however, an oral contract is also enforceable.

If the supplier does not adhere to the terms of the contract, for instance, by taking much longer than agreed to deliver the product, you may have a right to ask for your deposit to be returned.

If, on the other hand, you pay a deposit to a supplier who, in return, holds an article for you, but you change your mind about paying the balance, the supplier may not be obliged to refund your deposit.

It is in your interest to pay the least possible amount of deposit. Keep in mind that you are paying money for something which is still not yours, and hence, various problems could crop up before you actually take delivery of the product ordered.

One of the worst scenarios is when the supplier goes out of business.

If this happens, you may have considerable difficulty to get either the product or your money back. Usually, in these circumstances the supplier owes money to a number of people, so your claim is just one of many. There are rules on the priority to be given to the various debts in the case of a business going into liquidation or receivership. As a general rule, individual customers are low in this order of priority.

There could also be problems with the actual order; for instance, a different product may be delivered or it may arrive with missing components. Consumers should bear in mind that when such situations happen, the strength of their case very often depends on how much money they still owe to the supplier.

Hence, my advice is to hold on to your money until what you've ordered is delivered and carefully checked out.

Ms Vella is senior information officer, Consumer and Competition Division.

odette.vella@gov.mt, customer@timesofmalta.com