Debate On Some Aspects Of A Returnable Deposit

The lessee or the third party pay a sum of money towards the lessor to secure the lessee's future lease obligation.This certain amount of money means the lease security deposit(a sum payable as a first installment on the purchase of something or as a pledge for a contract,the balance being payable later).The lease security deposit are delivered in three forms:cash in sealed envelopes("Enveloped money"),uncovered cash,bank transfer or automatic bank ledger(the form of electronic money)."It generally be said in Taiwan that deposit is a kind of transferring guarantee not a kind of right pledge because right pledge is not in accordance with the meaning of the parties.Under transferring guarantee,the lessor is the deposit~'s owner in the trust sense,but the lessee or the third person enjoys the full ownership of the deposit.But considering the specificity of currency and account,and for the purpose of financial liquidity,the lessor should be deemed as the full owner of the deposit.Only when the lessor had received the deposit,the effectiveness of deposit occurs,however it should be understood loosely.When the lessee or the third party fails to pay the rent,the lessor shall have the right to rescind the lease.However,if the lease contract has been actually performed,the lessor may not exercise the right of cancellation.When the lease relationship eliminated and the rental objects be returned,the lessor need to return the deposit or the surplus of the deposit.The right asking for the deposit,affected by the prescription,the lessee has no right asking for“Bankruptcy Recall Right”.Unconditional confiscation of the deposit is invalid,the effectiveness of conditional confiscation of the deposit should be observed on specific circumstances,but the liquidity clauses should not be analogized to deny the effect of confiscation of rent confiscation agreements.The lessor's deduction right comes from the guarantee purpose of the deposit.The current logically coherent argument in Taiwan said that the deduction of the deposit is the action on non-legal,without notify the lessee,the deduction also take effect.when rental relationship exists,only the lessor has the right to decide the deduction,the lessee has to bear the tolerance obligations.While the lease relationship eliminated or the lease be sold,the deduction occurs automatically.However,taking into account the fact that the deduction of deposit does not have the appearance of behavior,insisting the action on non-legal will be unfavorable to the protection of the lessee.If the lessor deducts maliciously,it will be very difficult to calculate when the right of lessee is violated.Therefore,it is necessary to insist that before or during the occurrence of the deduction,the lessor had an obligation to notify the lessee,or the lessor must bear loss.It is also suitable to consider that the deduction is the exercise of the right of formation,only when the deduction notice arrived at the lessee the deduction comes into effect.In the case of the sale of the leased goods,scholars in Taiwan generally said that the buyer naturally inherited the lease contract.It is unfair that the buyer be considered bearing the obligation to return the deposit without doubt,the principle of subordination should not be applied by analogy.For taking the protection of the security of transactions and lowering transaction costs into account,the lease contract and the deposit contract are independent,when the lease contract parties changed,the deposit contract parties doesn't change.According to Article 150 of China Contract Law,the original lessor shall pay the deposit to the buyer,and the buyer shall also be entitled to deduct the deposit balance from the purchase price,if the lease item is auctioned,the deposit must be publicized.Before the deposit be transferred to the buyer,the original lessor shall bear the responsibility for the return of the deposit.After the deposit be transferred to the buyer,the responsibility for returning the deposit shall be transferred to the buyer.However,the lessee has no way knowing whether the deposit has been transferred or not,so it is necessary to provide in the form of legislation that the original lessor should bear the burden of proof of the transfer of the rent,and if he or she cannot prove it,he or she will still be responsible for the return of the deposit.China should supplement the legislation on deposit in contract law in the section of"Lease Contract".The deposit provision should stipulate the deduction procedure and the period of deposit's return,but should not stipulate the maximum amount of the deposit,calculating interest,saving it in the bank and so on for the purpose of protecting contract free.