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2024-01-30

Case Studies | Paid the decoration deposit, but the construction has not started yet!

裝潢糾紛

Delays in construction work, especially in decoration projects, are not uncommon. Particularly distressing is the situation the homeowner has already paid a deposit but finds that the contractor has not begun work. This can be a source of significant frustration and may even involve criminal activities like fraud. There are many reasons for construction delays, ranging from interruptions in material supply to insufficient manpower, and each can hinder project progress. However, when homeowners face intentional delays or fraudulent behavior, it not only incurs additional financial burdens but also immense psychological stress. For homeowners who have paid deposits, understanding how to handle such situations, protect their rights, and seek legal recourse if necessary, is key to resolving these issues.

 

【Case Background】

Xiao De, facing the dilapidation of his house, met Xiao Yi, the owner of a reputed construction firm, through a neighbor's recommendation. Trusting Xiao Yi's honest demeanor, Xiao De entrusted the renovation to him, agreeing on a three-month timeline and a total payment of 1 million yuan, with an upfront deposit of 400,000 yuan. However, two months later, with only tools placed at the site and virtually no progress made on the renovation, Xiao De's repeated requests for expedited work were ignored, and Xiao Yi eventually became unreachable. Left with no choice, Xiao De terminated the contract through a certified letter and sought our firm's help to recover the 400,000 yuan deposit.

 

【Local Court: Victory in the Lawsuit】

Our legal analysis suggested that according to the Supreme Court's 2019 ruling (Case No. 2168), "the termination of a contract can be mutually agreed upon by the parties involved, and the rights and obligations are determined by their agreement. The termination of a contract only nullifies it from the time of termination and does not have retroactive effect. The contractor must be paid for the work completed before the termination, but if the client has overpaid, they are entitled to reclaim the excess under unjust enrichment laws." Consequently, Xiao De successfully persuaded the court that Xiao Yi's failure to make any real progress, despite receiving the 400,000 yuan deposit, constituted an overpayment. The court ordered Xiao Yi to return the full amount under Article 179 of the Civil Code, ruling in favor of Xiao De.
 
When dealing with decoration projects, homeowners need to be vigilant about several key factors to avoid unnecessary troubles and losses. Choosing a reputable builder and ensuring clear contractual terms are vital to prevent project delays. Additionally, understanding legal rights is crucial for dealing with potential fraud or contract disputes. If you face construction delays, deposit issues, or suspect fraudulent activities in your decoration project, don't worry. De Yi Law Firm is always ready to offer professional legal advice and support. No matter the size of your problem, we are committed to finding the best solution for you. Feel free to contact us anytime to protect your rights and ensure the smooth progress of your decoration plans.



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