Also known as:down payments · downpayment · downpayments · deposit · initial payment
Written by attorneys · grounded in primary & secondary sources — see below
A portion of the purchase price paid in cash or its equivalent at the time a sale agreement is executed.
Sources & Authorities· 22 primary sources
Select any source to read its text and confirm it supports the definition.
Cases
Statutes
Federal Rules
Uniform Acts
How it applies
Common Examples
6
Lawyer Covers Trust Charges
Deanna Davenport paid a down payment on a new office building using client funds held in her trust account. To cover the bank's monthly service fees on that account she added a minimal amount of her own money. The deposit kept the account operational without violating the limit on personal funds.
Security Interest in Deposit Account
Daphne Doyle bought equipment for her business and made a down payment from her operating account. Dover Bank took a security interest in that account to secure the loan. The bank perfected its interest solely by obtaining control over the account.
Danielle Dixon opened a bank account and designated her niece as the POD beneficiary. She funded the account with a down payment on an investment property that later appreciated. Upon Danielle's death the remaining balance passed directly to the niece outside probate.
Attorney Receives Client Payment
Devon Drake received a large cash down payment from a client purchasing litigation support services. He placed the money into a new safe deposit box pending further instructions. The court held that the privilege did not protect physical funds from investigators.
Advance Fee Held in Trust
Dorothy Daniels paid a down payment on legal services before her lawyer began work. The lawyer deposited the entire sum into a client trust account. She withdrew portions only after completing each stage of the representation.
Political Contribution for Appointment
Dolores Diaz made a substantial down payment on legal-services retainer for a government agency matter. The payment was intended to secure appointment as counsel. The contribution raised questions about whether the selection rested on merit alone.
Common questions
Frequently Asked
1
What distinguishes a down payment from earnest money?+
A down payment is the initial cash portion of the purchase price paid when the sale agreement is signed. Earnest money serves as a deposit to show good faith and may be applied to the purchase price or forfeited upon breach.
Supporting sources
17 U.S. (4 Wheat.) 316 (1819)Business Associations
…cognizance. The Bank of the United States has constitutionally a right to establish branches or offices of discount and deposit within any State, and the State within which such branch is established cannot, without violating the Constitution, tax that branch. The State governments have no right to tax any of the…