News
In preliminary sale and purchase agreements, the failed return of a down payment does not constitute “appropriazione indebita”
- 03/04/2017
When a preliminary sale and purchase agreement (“contratto preliminare di compravendita”) is signed, the seller usually receives a sum from the buyer, as a down payment. Should the definitive agreement not be concluded, such payment is to be given back to the buyer.
In a case under the scrutiny of the Court of Cassation, the seller, who had not returned the down payment to the buyer, had been prosecuted for “appropriazione indebita” (embezzlement), punished by article 646 of the Italian Criminal Code.
With Judgment no. 15815 of last 29th March, the Court has stated that “appropriazione indebita” requires the appropriation of somebody else’s property and the refusal of returning it to its owner. However, in a case such that at issue, the seller becomes the owner of the said sum as soon as he gets it.
So, the Court has concluded that the failed restitution of a down payment does not constitute “appropriazione indebita”, provided for by article 646 of the Criminal Code, in that there is no appropriation of somebody else’s property. Instead, it represents a mere breach of contract.
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