The nature of a payment made by way of deposit on account of the selling price in the promise of sale contract (konvenju) in the light of recent jurisprudence : an assessment in comparison with a payment made by way of earnest

Abstract

Largely based on Maltese judgments, this thesis aims at updating previous studies on the promise of sale agreement (konvenju) that were carried out in two theses submitted in 1969 and in 2001, namely; 'Promise of Sale' by Joseph Brincat (1969) and 'Promise of Sale' by Tania Farrugia (2001). The main focus of the thesis will however be on the nature of the deposit on account of the price (akkont) in comparison with earnest (kapparra) that is paid on such agreement as well as on the evolution of the manner in which such deposit is lost/forfeited. The thesis is divided into five chapters in the following manner: Chapter 1 gives a brief overview of the promise of sale agreement supplementing, where necessary, the position outlined in previous years. Due to the fact that the contract per se is not the focus of this thesis, supplementary readings on the matter are suggested since detail had to be kept at a minimum due to word count restrictions. Chapter 2 goes on to examine the institute of earnest and delves into the difference between the confirmatory form of earnest and the penitentiary form of earnest. Chapter 3 delves into the notion of deposit on account of the price discussing its nature and legal implications while attempting to draw a difference between the simple and the forfeitable types of deposit as well as between such two types of deposit and earnest. Chapter 4 outlines the manner in which loss/forfeiture of an amount paid by way of deposit on account of the price and qualified as forfeitable has been held to occur by the Maltese Courts of law. 4 Chapter 5 concludes this study by outlining the changes brought to a well set system of loss/forfeiture of the forfeitable deposit by the Pont Gloria vs J.L.J. Construction Company Limited Court of Appeal judgment. This chapter goes further into delineating some considerations that arose during the whole study and gives recommendations aimed at clarifying the legal position of the institute of forfeitable deposit.