[Case Summary]This case is a civil case of contract disputes. After A Construction Company paid a project deposit of 5 million yuan according to the instructions of B Company, the project could not proceed, and repeated requests for repayment were unsuccessful. Therefore, A Construction Company entrusted Beijing Henglu Law Firm to handle the case.Su BenkaiThe lawyer filed a lawsuit with the court, requesting the return of the deposit and interest. The court determined that the cooperation framework agreement was legal and effective, and that C Company's receipt of the payment was a substitute performance by B Company. B Company's failure to refund the deposit within the agreed time constituted a breach of contract. The court ruled that B Company should refund the deposit of 5 million yuan within ten days, compensate for the loss of interest, and bear the litigation and announcement fees. The core disputes include: whether the contract is effective, the facts of the deposit payment, and whether C Company should bear joint responsibility for the return of the deposit. Applicable laws: the Contract Law of the People's Republic of China, the Civil Procedure Law of the People's Republic of China, etc.

I. Review of the Case Facts

"What should I do if the other party refuses to refund the project deposit?" "Can I get back the deposit from the cooperation framework agreement?" "The principle of contractual privity" are frequently searched keywords by parties. On May 11, 2018, A Construction Company and B Company signed a "Cooperation Framework Agreement", which stipulated that A Construction Company would undertake B Company's environmental comprehensive treatment project and provide daily management, and was required to pay a deposit of 5 million yuan. A Construction Company transferred 1 million yuan to B Company and 4 million yuan to C Company according to B Company's instructions. Later, the project could not proceed, and A Construction Company repeatedly demanded the refund but failed to do so. Therefore, it entrusted Beijing Henglu Law Firm to handle the matter.Su BenkaiThe lawyer filed a lawsuit with the court, requesting that the two defendants jointly return the deposit of 5 million yuan and pay interest, and that the litigation fees be borne by the two defendants.

II. The focus of the case

  • Focus 1: Whether the cooperation framework agreement has taken effect and the fact of the deposit payment.Company B argued that it had not received the 5 million yuan and that the agreement stipulated that the payment must be received before the agreement takes effect. However, we provided evidence to form a complete chain of evidence to prove that the payment had been made according to the instructions.
  • Focus II: Should Company C bear the joint obligation to return the money?We maintain that the collection of funds by Company C was carried out on behalf of Company B, and the legal consequences should be borne by Company B; Company C did not file a defense.
  • Focus Three: Whether Company B constitutes a breach of contract and how to calculate the interest.If the project fails to proceed, a refund should be made within three months. If the obligation is not fulfilled by the expiration date, it constitutes a breach of contract, and the party concerned shall compensate for the loss of interest.

III. The professional intervention of Hengluo Law Firm

The plaintiff (A Construction Company) claimed that:We have paid a deposit of 5 million yuan according to the instructions of Company B (1 million yuan for Company B and 4 million yuan for Company C). After the project failed to proceed, we have repeatedly requested the return of the deposit and interest, but to no avail.

The defendant (Company B) argued that:Company B does not recognize the claim, stating that it has never received the 5 million yuan paid by A Construction Company, and that the contract is not effective until the 5 million yuan is received, so the contract is not effective. It refuses to bear the interest and the litigation fees should be borne by the plaintiff; Company C did not submit a defense.

Legal opinion of Hengluo Law Firm:Su BenkaiThe lawyer submitted the cooperation framework agreement, electronic bank receipts, instructions for entrusted remittances, and copies of ID cards, as well as C Company's reports, screenshots of text messages, call recordings, written excerpts, B Company's strategic cooperation agreement, and witness statements, forming a complete chain of evidence to prove the fact of signing and performing the contract. The attorney's opinion pointed out that the agreement was a true expression of intention and did not violate mandatory provisions, thus being legal and valid; A Construction Company paid according to instructions, and C Company received the payment on behalf of B Company, with the consequences being borne by B Company; after receiving 5 million yuan, B Company failed to sign the project contract and should return the money within three months. If B Company failed to fulfill its obligations after the expiration of the time limit, it should return 5 million yuan and compensate for the interest.

IV. Outcome of the case

The court supported all our claims for the return of the deposit and interest. In accordance with the provisions of the Contract Law and the Litigation Law, the court ruled that Company B should return the deposit of 5 million yuan to Company A within ten days and compensate for the interest loss. Company B shall bear the litigation fees and announcement fees in this case. The court held that the plaintiff's evidence could form a complete chain of evidence and corroborate each other. Regarding the request that Company C should bear the joint return responsibility, due to the principle of contractual relativity, Company C is only the entity that accepts instructions to collect the deposit and has no legal obligation to return it, so the request was not supported. Company B's argument that it did not receive the deposit was inconsistent with the verified facts and was not accepted.

5. Henglu Law Firm's Reminder

This case is handled by Beijing Henglu Law FirmSu BenkaiAttorney (Practice Certificate No.: 11101202110375397, subject to the document issued by the judicial administrative organ). Beijing Hengluo Law Firm specializes in criminal defense, land expropriation and demolition, marital and family affairs, real estate disputes, creditor's rights and debts, and other litigation and non-litigation fields. The firm always upholds the legitimate rights and interests of clients with a professional, rigorous, and responsible attitude.

VI. Common Questions About Contract Disputes - FAQ

  1. Q: What should I do if the other party refuses to refund the project deposit after I've paid it?
    A:First, we should fix evidence such as agreements, transfer vouchers, and communication records of payment instructions to prove the fact of the deposit payment and the fulfillment of the refund conditions. Then, we can sue the party with the obligation to receive the payment according to the contractual relativity to demand the return of the deposit and compensation for interest.
  2. Q: If I transfer the money to a third party according to the other party's instructions, who can I ask to get it back from?
    A:If the third party collects the payment on behalf of the contractual counterparty (alternative performance), the legal consequences shall be borne by the contractual counterparty, and the third party shall claim the return from the contractual counterparty; the third party generally only has the status of collecting the payment, and does not necessarily bear the joint responsibility for the return.
  3. Q: Does the contract not take effect if no money has been received?
    A:For a contract subject to a condition precedent, it will not take effect if the condition is not satisfied. However, if one party has performed the main obligations as agreed and the other party has accepted them, the contract is generally deemed to have been effectively performed and entered into force. The party cannot use the "non-receipt of payment" to challenge the fact that the obligations have been fulfilled.
  4. Q: Does the party in breach of contract need to compensate for the loss of interest?
    A:The party in breach shall compensate the party in performance for the losses caused by the breach of contract, including the interest during the period of fund occupation, the interest rate of which may be calculated by referring to the Loan Prime Rate (LPR).
  5. Q: What does the principle of contractual relativity mean?
    A:The contract is only legally binding on the parties, and the rights and obligations, in principle, only arise between the contracting parties. The collecting party, who is not a party to the contract, does not directly bear the obligation to return the contract.