Cyprus Court of Appeal Orders Refund of €50,000 Deposit in Uncompleted Business Sale Citing Unjust Enrichment
The Cyprus Court of Appeal has ruled that a €50,000 deposit paid for a business transfer must be returned to the purchaser after the agreement was not completed. While no breach of contract or fault was found against the seller, the court determined that retaining the deposit alongside the business assets constituted unjust enrichment.
The judgment clarifies that contractual liability is not the sole factor in such cases; when an agreement fails and no lawful basis exists for retaining a payment, private law principles require restitution to restore economic fairness. This ruling highlights that deposits do not guarantee unconditional ownership and repayment may be necessary even without breach of contract.
The decision emphasizes the role of private law in preventing unjust financial gain and maintaining balance between parties in commercial transactions. For Cyprus’s business community, it sends a clear message that legal entitlement to deposits depends on the continued validity of the contract or proven loss, reinforcing fairness beyond strict contractual terms.
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