Down Payment Refund Lawsuit | Assisting the Client to Secure a Full Refund of the Down Payment

If a 🔗contract has been rescinded or terminated but the down payment has not been returned, the down payment must be recovered through a down payment refund lawsuit.

A lawsuit relating to the return of a down payment has the nature of a kind of 🔗claim for return of unjust enrichment, and the contracting party bears an obligation to make restitution for the other party's loss.

The right of rescission includes the contractual right of rescission and the statutory right of rescission.

The contractual right of rescission is a right of rescission that arises under the contract where the contracting parties have made a special agreement regarding the reservation of a right of rescission.

The statutory right of rescission refers to a right of rescission that arises as a matter of course by operation of law, and the Civil Act provides for two grounds: delay in performance and impossibility of performance.

1. In the case of delay in performance:

If one party fails to perform its obligation, the other party may fix a reasonable period and demand performance, and if performance is not made within that period, may rescind the contract. However, if the obligor has indicated in advance an intention not to perform, no such demand is required.

Where, by the nature of the contract or by the parties' declaration of intent, the purpose of the contract cannot be achieved unless performance is made within a fixed date or period, and one party fails to perform at that time, the other party may rescind the contract without fixing a reasonable period and demanding performance.

2. In the case of impossibility of performance:

If performance has become impossible due to a cause attributable to the obligor, the obligee may rescind the contract.

For the down payment refund lawsuit, the client's attorney argued that the defendant had not performed the terms set out in the contract.

The attorney emphasized that the contract had been rescinded due to the defendant's delay in performance, and that an obligation to return the down payment had therefore arisen.

The contract clearly specified the date on which the exercise equipment was to be delivered, yet the defendant had still not delivered the equipment.

The attorney handling the down payment refund lawsuit argued that the contract had been rescinded due to the defendant's delay in performance, and requested the return of the down payment.

The client's attorney pointed out the defendant's irresponsible attitude.

When the client requested the return of the down payment following the non-performance of the contract, the defendant instead argued that the fault lay with the client on the ground that the client had not paid the remaining balance of the down payment.

The client's attorney pointed out that it was only natural that the client could not pay the remaining balance to the defendant, who had shown no progress whatsoever over the three years that had passed since the contractual performance date, and that the defendant's attitude in instead shifting the fault onto the client was highly irresponsible.