Definition of deposit and security deposit: deposit is a kind of security interest and a special form of pledge guarantee, that is, the debtor or a third party transfers a certain amount of money or equivalent to the creditor for possession in order to guarantee the performance of the debt, and when the debtor fails to perform the debt under the contract, the creditor can get priority compensation from the deposit. Deposit is a customary way in the process of non-governmental transactions, and this kind of guarantee is neither explicitly recognized nor prohibited by our laws.
Security deposit refers to the money reserved or deposited by one or both parties to a contract in a third party to ensure the performance of the contract. This concept is widely used, such as contract bond, performance bond in bidding, bond in futures trading, and even bond in bail pending trial.
There are two popular forms of deposit in real economic life: one is the deposit that the parties to a contract ask the other party to provide in order to ensure the realization of their creditor's rights. Another form of deposit is the deposit paid by both parties to a third party recognized by * * to ensure the performance of their respective obligations when the contract is established.
According to the provisions of Article 89 of the Guarantee Law of People's Republic of China (PRC), the parties may agree that one party shall pay a deposit to the other party as a guarantee for the creditor's rights. After the debtor performs the debt, the deposit shall be used as the price or recovered. If the party paying the deposit fails to perform the agreed debt, it has no right to demand the return of the deposit; If the party receiving the deposit fails to perform the agreed debt, it shall return the deposit twice.