LAW OF OBLIGATION ACT, PART 8, CHAPTER 45, DIVISION 1

Chapter 45

DEPOSIT CONTRACT 

Division 1

General Provisions 

  • 883. Definition of deposit contract

By a deposit contract, one person (the depositary) undertakes to keep a movable delivered to the depositary by another person (the depositor) and return it to the depositor upon termination of the deposit.

  • 884. Storage fee

(1) A depositary has the right to receive remuneration (a storage fee) only if the parties have expressly agreed thereon or if payment of remuneration may be expected under the circumstances.

(2) A storage fee is deemed to have been tacitly agreed upon if, under the circumstances, taking deposit of a movable is to be expected only for remuneration, particularly if the depositary enters into a deposit contract in the course of the economic or professional activities thereof.

  • 885. Liability upon gratuitous deposit

In the case of a gratuitous deposit, the depositary shall not be liable for the loss or destruction of or damage to a thing or for failure to return the thing on time, provided that the depositary has exercised such care in keeping the thing as the depositary would normally exercise in keeping the depositary’s own things.

  • 886. Use and transfer of thing to third party

(1) It is presumed that the depositary shall not use the thing or grant it for use to or deposit it with a third party.

(2) If the thing is deposited with a third party, the depositary shall be liable for the activities of the third party in the same manner as for the depositary’s own activities, unless the deposit of the thing is undertaken gratuitously and the depositary is forced to transfer the deposit due to circumstances not dependent on the depositary.

(3) If the depositary uses the thing despite its use being prohibited, the depositary shall pay the depositor a reasonable fee for the use of the thing and shall be liable for the destruction of and damage to the thing unless the depositary proves that the thing would have been destroyed or damaged even if kept by the depositor.

  • 887. Change of manner of custody

The depositary may change the manner of custody agreed upon if the depositary can assume that the depositor would approve of the change if the depositor had known of the circumstances which brought about the change. The depositary shall promptly notify the depositor of any change in the manner of custody.

  • 888. Reimbursement of expenses and compensation for damage caused to depositary

(1) The depositor shall reimburse the depositary for any expenses related to the deposit which the depositary may have regarded as necessary under the circumstances. The depositary has the right of security in respect of the deposited thing in order to ensure reimbursement of the expenses and the claims for payment.

(2) The depositor shall compensate the depositary for any damage arising from the dangerous nature of the thing unless, at the time of the deposit, the depositor did not know and did not have to know of the dangerous nature of the thing or unless the depositor gave the depositary notice of the dangerous nature of the thing or the depositary knew this in any case.

  • 889. Depositor’s right to demand return of thing

The depositor may cancel the deposit contract and demand the return of the thing deposited at any time even if the term for deposit has been agreed upon. If the term for deposit has been agreed upon, the depositor shall reimburse the depositary for any expenses incurred by the depositary bearing in mind the agreed term.

  • 890. Depositary’s right to claim withdrawal of thing

If the term for deposit has not been determined, the depositary may cancel the deposit contract at any time and demand that the thing deposited be taken back by the depositor. If the term for deposit has been determined, the depositary may demand that the thing be taken back before expiry of the term only with good reason.

  • 891. Requirements for return

(1) The return of the deposited thing shall be made at the expense of the depositor at the place where the thing is to be kept pursuant to the deposit contract.

(2) The thing shall be returned in the condition in which it was deposited. The depositor shall bear the risks related to the return of the thing.

  • 892. Transfer of profit

Upon return of the deposited thing, the depositary shall also transfer the profit received from the thing.

  • 893. Plurality of depositors or depositaries

(1) If the thing is kept jointly by several persons, they shall be jointly and severally liable to the depositor for performance of the obligations arising from the deposit contract. If the thing is deposited jointly by several persons, these persons are solidary obligees in respect of the depositary.

(2) If several persons have submitted a claim in respect of the thing and have deposited the thing with a third party (sequester) in order to protect their interests, the third party may deliver the thing only with the consent of all the depositors.

  • 894. Conditions of payment of storage fee

(1) If a storage fee is to be paid, the depositor shall pay the fee at the time of termination of the custody. If payment of the storage fee is determined on the basis of several periods of time, the fee shall be paid at the end of each period.

(2) If custody ends before expiry of the agreed term, the depositary may demand payment of a part of the storage fee in proportion to the actual time of the deposit.

  • 895. Rights of third parties

(1) The depositary shall promptly notify the depositor of loss of possession of the deposited thing or submission of a claim against the depositary for delivery of the thing or if the depositary becomes aware of the rights of a third party to the deposited thing.

(2) If a third party applies for recognition of ownership regarding the deposited thing and submits a claim against the depositary for delivery of the thing, the depositary shall not deliver the thing to the third party without the consent of the depositor. The depositary may return the thing to the depositor. The depositary may refuse to deliver the deposited thing to the depositor if the thing is seized or an action for recognition of ownership of the thing is filed against the depositor.

  • 896. Deposit of money and other fungible things

(1) If fungible things are deposited such that the depositary undertakes to return things of the same kind, quality and quantity, it is presumed that the ownership and the risk of accidental loss of and damage to the things will be transferred to the depositor upon delivery of the things, and the provisions concerning loans apply correspondingly.

(2) In the case specified in subsection (1) of this section, it is presumed that the term and place for returning things will be determined pursuant to the provisions of law regarding deposit contracts.

(3) If the depositary spends any deposited money, the depositary shall pay interest for the time during which the money was spent.

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