Traditionally deposits are paid on exchange of contracts as part – payment of the purchase price and a guarantee that the purchaser will complete the contract. If the purchaser fails to complete the contract, then the seller will be at liberty to forfeit the entire amount although he has suffered no financial loss. In an open contract rule, the purchaser is not nor liable to pay a deposit and, therefore, it is important that it should be mentioned in the contract that a deposit is payable. However according to the Standard Conditions, a deposit of 10% of the purchase price is to be paid or sent not later than the date of the contract. When the exact amount is calculated, the chattels and the preliminary amount paid to the brokers must be deducted from the same.. This payment must either be paid by a banker’s draft or by a solicitor’s clearing bank account cheque. The advocate of the purchaser must therefore ensure that he receives the cheque well before time so that it is encashed well before time. Attorneys should always be in search of purchasers, who are ready to pay the deposit directly to the seller.
