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In legal language, a deposit is called a bail. It is a contractual security given by the obligor of a contract to secure a claim.
A bailment is a security for the performance of a contractual obligation which is created by the contractual provision of
something to be bailed to the other party to the contract, whether by actual delivery or otherwise. It is a security for the party
who receives it, because if the party who gives it does not fulfil his contractual obligation, the other party can use it to satisfy
his claims under the contract. Money can be given as bail, which is one of the most common forms of bail. However, many
things other than money can be used as bail. For example, securities or payment account receivables (i.e. the amount in a
payment bank account) can also be bailed, as well as electronically generated and recorded (so-called dematerialised)
securities. Other assets may also be given as bail if a specific law allows this. This should be understood to mean, in particular,
other things or rights of pecuniary or capital market value, such as claims on client accounts held by investment firms.
In the event that the bailing party fails to perform its contractual obligation within the time limit for performance, the other
party may satisfy its claim out of the bail. There are several ways in which this can be done. For example, if the bail is in the
form of money, a payment account receivable, a stock exchange or other publicly traded security, the bailee may obtain
ownership of the bail up to the amount of the secured claim. In cases where the law does not allow the rightful party to
obtain the bail directly in the above manner, satisfaction may be obtained by judicial enforcement or by other means as
provided for in the Civil Code, such as sale by the bail holder. In the case where the same object is subject to both a
bailment and a mortgage, the holder of the bailment has priority over the holder of the mortgage. The deposit does not
constitute an advance payment within the meaning of the VAT Act, so its receipt is not subject to VAT. The security must
be used only for the purpose of satisfaction and any agreement to the contrary is void.
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