What should I do if I demand double down payment compensation and the other party refuses?

If the other party refuses double down payment compensation, the company can proceed with a double compensation claim through civil procedures.

According to Article 565 of the Civil Act, in a contract where a down payment has been exchanged, when one party cancels the contract, the party that paid the down payment can cancel the contract by forfeiting the down payment, and the party that received the down payment must return double the amount of the down payment to cancel the contract.

Therefore, if the other party refuses to perform the contract while not paying the double down payment compensation, it can lead to legal disputes.

In contract disputes between companies, it is common to respond with the following procedures.

1. Review of contract content and timing of cancellation

You must confirm the nature of the down payment in the contract (cancellation money or penalty) and clearly analyze the timing of whether the right to cancel the contract was legitimately exercised before the other party's "commencement of performance (payment of intermediate payment, preparation for payment of balance, commencement of construction, etc.)."

2. Legal notification and evidence preservation

Officialize the intent to cancel the contract and the basis for the double down payment compensation claim through certified mail.

Particularly, when the seller intends to cancel the contract, it is key to prove that the double amount has actually been provided or that preparations for the offer of performance have been completed.

3. Review of additional damages

In transactions between companies, in addition to double the down payment, business losses or opportunity costs resulting from the breach of contract may occur.

If there are separate damages provisions in the contract, the scope of the claim can be expanded by combining these.

The Corporate Legal Affairs Group at Daeryun Law Firm reviews the contract structure and reasons for cancellation and responds systematically.

In preparation for the possibility of the other party hiding funds, we quickly carry out preservation measures such as provisional seizure of corporate accounts or real estate before litigation to help with claim recovery, and assist so that the double down payment compensation judgment in the civil lawsuit can lead to actual enforcement.

If you need to respond to double down payment compensation, we recommend that you respond safely through the strategy of Daeryun Law Firm's corporate attorney.