According to the Contract Law of People's Republic of China (PRC):
Article 1 15 Deposit
The parties may, in accordance with the People's Republic of China (PRC) Guarantee Law, 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.
Article 116 Where the parties have agreed on both liquidated damages and deposit, if one party breaches the contract, the other party may choose to apply the liquidated damages or deposit clause.
Article 117 Where a contract cannot be performed due to force majeure, it shall be exempted from liability in part or in whole according to the influence of force majeure, unless otherwise stipulated by law. If force majeure occurs after the delay in performance, the parties concerned cannot be exempted from their responsibilities.
Force majeure as mentioned in this Law refers to unforeseeable, unavoidable and insurmountable objective circumstances.
Article 118 If one party is unable to perform the contract due to force majeure, it shall notify the other party in time to reduce the possible losses to the other party, and shall provide proof within a reasonable time.
Article 119 After one party breaches the contract, the other party shall take appropriate measures to prevent the loss from expanding; If appropriate measures are not taken to expand the losses, no compensation shall be claimed for the expanded losses.
The reasonable expenses incurred by the parties to prevent the loss from expanding shall be borne by the breaching party.
Article 120 Where both parties breach a contract, they shall bear their respective responsibilities.
Article 121 If a party breaches a contract for the reason of a third party, it shall be liable to the other party for breach of contract. Disputes between the parties and the third party shall be settled according to law or in accordance with the agreement.
Article 122 If a party violates the personal and property rights and interests of the other party, the injured party has the right to require it to bear the liability for breach of contract in accordance with this Law or to require it to bear the liability for infringement in accordance with other laws.
Extended data:
According to the guarantee law:
Article 115 Where the parties agree to pay the deposit as a guarantee for concluding the main contract, if the party paying the deposit refuses to conclude the main contract, it has no right to demand the return of the deposit; If the party receiving the deposit refuses to conclude a contract, it shall return the deposit twice.
Article 116 Where the parties agree that the payment of the deposit is an important condition for the formation or entry into force of the main contract, the party paying the deposit will not pay the deposit, but the formation or entry into force of the main contract will not be affected if the main contract has been performed or the main part has been performed.
Article 117 After the deposit is paid, the party paying the deposit may terminate the main contract and lose the deposit as agreed in the contract, while the party receiving the deposit may terminate the main contract and pay double the deposit. After the termination of the main contract, the provisions of the Contract Law of People's Republic of China (PRC) shall apply.
Article 118 Where the parties have delivered the lien, deposit, deposit, contract money, deposit or deposit, but the nature of the deposit has not been stipulated, and the parties claim the right of deposit, the people's court shall not support it.
Article 119 Where the actual amount of deposit paid is more than or less than the agreed amount, it shall be deemed as a change of the deposit contract; If the party receiving the deposit raises an objection and refuses to accept the deposit, the deposit contract will not take effect.
Article 120 If one party delays in performance or commits other breach of contract, so that the purpose of the contract cannot be achieved, the penalty of deposit may be applied. Unless otherwise provided by law or agreed by the parties.
If one party fails to fully perform the contract, it shall collect the deposit penalty according to the proportion between the unfulfilled part and the contents agreed in the contract.
Article 121 Where the amount of deposit agreed by the parties exceeds 20% of the amount of the subject matter of the main contract, the people's court shall not support the excess.
Article 122 If the main contract cannot be performed due to force majeure or accidents, the penalty of deposit shall not apply. If the main contract cannot be performed due to the fault of a third party other than the contractual relationship, the penalty of deposit shall apply. The party punished by the deposit may claim compensation from the third party according to law.
Baidu Encyclopedia-People's Republic of China (PRC) Contract Law