Advance and deposit: what the Civil Code says
Ukraine's Civil Code has no separate concept of "prepayment". Money paid before a service is provided comes in two kinds, and the law tells them apart by one feature: what the contract calls it.
- A deposit (zavdatok) is a sum the debtor gives the creditor towards payments under the contract, to confirm the obligation and secure its performance (Article 570, Part 1). It is a way of securing an obligation, like a penalty or a guarantee (Article 546).
- An advance (avans) is everything else. Article 570, Part 2: unless it is established that the sum paid is a deposit, it is deemed an advance.
That gives the rule that settles most disputes: by default, prepayment is an advance. Calling it a deposit in conversation or on a sign is not enough to make it one. A transaction securing an obligation must be made in writing, and without written form it is void (Article 547). Electronic form counts as written: an exchange of emails or messages, or acceptance of an offer on a website (Article 207).
The consequences differ:
| Advance | Deposit | |
|---|---|---|
| What it is | Part of the payment made upfront | Part of the payment made upfront and security for the contract |
| Form | Any, even a verbal agreement | Written only; otherwise the term is void and the sum counts as an advance |
| Client withdrew in advance | Refunded, minus payment for the part of the service provided or costs, if the contract provides for them | Stays with the provider (Article 571, Part 1) |
| Provider cancelled | Refunded | Refunded plus the same amount again (Article 571, Part 1) |
| Contract ended before performance began, or performance became impossible | Refunded | Refunded (Article 571, Part 3) |
The basis for refunding an advance is Article 1212: a person who received property on grounds that later fell away must return it. No service, no grounds to keep the money.
Advance or deposit in your case
- Does a written contract, offer or message with the terms say plainly that the sum is a deposit?A "prepayment is non-refundable" sign, a word in conversation or a line on a receipt is not a contract. A website offer the client accepted, or a messenger exchange setting out the terms, is. No → it is an advance; if the client cancels in advance, it is refunded minus work already done
- Is the client buying the service for themselves, not for a business?An individual booking a haircut, a stay or a repair for personal needs is a consumer. Consumer Protection Law No. 3153-IX applies to them. No, the client is a company or a sole proprietor buying for business → the deposit works under Article 571 as the contract says
- Does the consumer contract say a provider who cancels returns the deposit twice over?Without that term, a right to keep the deposit of a consumer who withdrew is void (Article 15, Part 3, point 3 of Law No. 3153-IX). No → for a consumer it is effectively an advance
- Does the amount the consumer loses on cancellation stay within 30% of the service price?An obligation on a consumer to pay a fine, penalty or compensation above 30% of the price for failing to perform the contract is a void term (point 4 of the same part). Yes → the deposit can be kept; no → risk that the term is held void
Who cancelled — what is refunded
An illustrative example: the service costs UAH 4,000 and the client paid UAH 2,000 upfront (50%). Here is what happens in each case under the Code and the consumer protection law.
| Situation | Advance of UAH 2,000 | Deposit of UAH 2,000, client is a company | Deposit of UAH 2,000, client is a consumer |
|---|---|---|---|
| Client cancelled in advance | Refund UAH 2,000, minus payment for the part already provided or costs, if the contract provides for them | Keep UAH 2,000 | Can be kept only if the contract provides for a double refund; above 30% (UAH 1,200) there is a risk the term is void |
| Client did not show up at the booked time | The service became impossible through the customer's fault: the provider is entitled to payment in full unless the contract or law says otherwise (Article 903, Part 2). For a consumer, a contract term on compensation above 30% of the price is void, so counting on the full amount is risky | ||
| Provider cancelled | Refund UAH 2,000 | Refund UAH 2,000 and pay UAH 2,000 more | Refund UAH 2,000 and pay UAH 2,000 more |
| Cancelled by agreement before the start | Refund UAH 2,000 | Refund UAH 2,000 | Refund UAH 2,000 |
| Service impossible through no one's fault (all-day power cut, the specialist falls ill) | Refund UAH 2,000, minus a reasonable payment if the provider can justify it (Article 903, Part 2) | Refund UAH 2,000 (Article 571, Part 3) | Refund UAH 2,000 (Article 571, Part 3) |
| Provider did not deliver on time | The consumer chooses either a new deadline or withdrawal; in that case the prepayment is refunded within 14 days of their request (Article 10 of Law No. 3153-IX) | ||
The limit is 30% of UAH 4,000 under Article 15, Part 3, point 4 of Law No. 3153-IX. An advance, and a deposit in a consumer contract without a double-refund term, are refunded in full, minus payment for the part of the service actually provided.
A no-show is a separate case. If the client does not come, the service cannot be provided through their fault, and Article 903 allows the provider to claim full payment. But the procedure and consequences of terminating a services contract are set by agreement of the parties or by law (Article 907), so it is safer to cover no-shows explicitly in the contract than to rely on the general rule.
Payment for work already done is a separate matter too. If a tradesperson has bought materials at the client's request or started work, the law is explicit for off-premises and distance contracts: a consumer who withdraws pays an amount proportional to the value of the work done or service provided up to the moment of withdrawal (Article 21, Part 12 of Law No. 3153-IX). For a work contract (pidriad), the Code lets the customer withdraw at any time before the work is finished, paying for the part completed and compensating losses (Article 849, Part 4). So what can be kept is not "the prepayment" but the value of what has already been done, and you need to be able to show it: a receipt for materials, a completion act.
What is void in a consumer contract
Article 15 of Law No. 3153-IX makes void any terms that were not individually negotiated with the consumer and that create a significant imbalance in favour of the business. A website offer or booking rules are exactly that: drafted in advance, with no way for the client to influence them. The burden of proving a term was individually negotiated lies with the business.
Four points of Part 3 matter for prepayment:
- Point 3. A right not to return the deposit of a consumer who decided not to perform the contract is void if the contract lacks the mirror term: the consumer gets the deposit back twice over if the provider pulls out.
- Point 4. An obligation on the consumer to pay a fine, penalty or compensation above 30% of the price for failing to perform the contract is void. A "50% prepayment is non-refundable on cancellation" term falls into the risk zone of this point.
- Point 5. A right of the business to terminate the contract at its own discretion when the consumer has no such right.
- Point 6. A right not to return money for a service not provided when the business itself withdrew from the contract.
A void term has no effect from the start, with no court decision needed. The rest of the contract stays in force.
One more caveat for online booking. For leisure services, catering, car rental or accommodation with a specific date, a consumer cannot use the right to withdraw from a distance contract under Article 21 (Part 13, point 3). That concerns the 14-day withdrawal right only, not the rules on advances and deposits: what to refund on cancellation is still decided by Articles 570–571 of the Code and Article 15 of the law.
What else an online shop's or service's offer needs is covered in the article on the legal minimum for an online shop.
Wording for an offer or booking page
Below is a template of terms for a salon, guesthouse or tradesperson working with consumers. Fill in your own amounts and deadlines, and show it to a lawyer before publishing, because the wording depends on the type of service.
| What to settle | How to word it |
|---|---|
| Name of the sum | "To make a booking, the Customer pays a deposit of UAH … (no more than 30% of the service price), which is credited towards payment for the service." |
| Client withdraws | "If the Customer cancels the booking later than … hours before the start or does not show up, the deposit stays with the Provider. If cancelled before that deadline, the deposit is refunded within … days." |
| Provider withdraws | "If the Provider cancels the service, it returns the deposit to the Customer twice over within … days." |
| Impossibility through no one's fault | "If the service cannot be provided for reasons for which neither party is responsible, the deposit is refunded in full." |
| Cost of materials | "If the Provider bought materials at the Customer's request before the service, on cancellation the Customer reimburses their cost against a receipt." |
| How it is accepted | The client ticks "I have read the booking terms" before paying, and the terms arrive in the booking confirmation. |
If prepayment is taken by a messenger bot or an online booking system, the terms must be shown before payment, not in a separate document nobody clicks. How a booking bot works in a salon and a guesthouse is covered in the articles on AI for a beauty salon and on AI for a hotel or guesthouse.
Our position
For a business working with consumers, take a deposit of no more than 30% of the service price, write the mirror double-refund term into the contract, and show the terms before payment. That way a no-show costs the client real money, and the term does not fall apart at the first complaint. Keeping the whole 50–100% prepayment from a consumer is the most common way to lose the dispute: if the money is not called a deposit, it is an advance; if it is, but above 30% and without a double refund, the term risks being void.
This position does not hold for contracts with companies and sole proprietors buying a service for their business. The consumer protection law does not cover them, and a deposit of any size agreed in writing works under Article 571 of the Code. There the contract text decides, and there is no 30% limit.
Checked on 3 November 2026 against the texts of Ukraine's Civil Code (Articles 207, 546, 547, 570, 571, 849, 903, 907, 1212, version of 05.08.2026) and Consumer Protection Law No. 3153-IX (Articles 10, 15, 21, as amended on 16.12.2025). The texts were checked against archived copies of the zakon.rada.gov.ua pages from 10.10.2026: on 3 November the site was not responding. This is an overview of the rules, not legal advice for a specific contract.