I demanded reimbursement of double the contract deposit, but what should I do if the other party refuses?

If the other party refuses reimbursement of double the contract deposit, a company can proceed with a claim for reimbursement of the double amount through civil procedures.

Under Article 565 of the Civil Act, in a contract where a contract deposit has been given and received, if one party rescinds the contract, the party that paid the contract deposit can rescind the contract by forfeiting it, and the party that received the contract deposit must repay double the contract deposit in order to rescind the contract.

Therefore, if the other party refuses to perform the contract while also not paying reimbursement of double the contract deposit, it may lead to a legal dispute.

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

1. Review of the contract content and the timing of rescission

You must confirm the nature of the contract deposit under the contract (whether it is a cancellation deposit or a penalty) and clearly analyze the point in time of whether the right to rescind the contract was legitimately exercised before the other party engaged in the 'commencement of performance (payment of the interim payment, preparation to pay the balance, commencement of construction, and the like)'.

2. Legal notice and preservation of evidence

Through certified mail, formalize your intent to rescind the contract and the grounds for the claim for reimbursement of double the contract deposit.

In particular, where the seller seeks to rescind the contract, it is key to prove that the seller has actually provided the double amount or completed the preparation for the tender of performance.

3. Review of additional damages

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

If the contract has a separate damages provision, you can aggregate these and expand the scope of the claim.

Daeryun Law LLC's Corporate Legal Affairs Group reviews the contract structure and the grounds for rescission and responds systematically.

In preparation for the possibility that the other party may conceal funds, we promptly proceed with preservative measures, such as a provisional attachment of the corporate account or real estate before litigation, to assist with the recovery of the claim, and we help ensure that a judgment for reimbursement of double the contract deposit in the civil litigation can lead to actual execution.

If you need to respond to reimbursement of double the contract deposit, we recommend that you respond securely through the strategy of a corporate attorney at Daeryun Law LLC.