Caparra Confirmatoria (Earnest Money Deposit

A sum of money paid by the buyer upon signing a preliminary contract (compromesso) to confirm the commitment in a real estate deal. Under Article 1385 of the Italian Civil Code, if the buyer defaults, the seller may keep the caparra confirmatoria ; if the seller defaults, the buyer can demand double the deposit back. This deposit is typically 10%–20% of the purchase price. It serves as a remedy for breach: instead of suing for performance, the non-breaching party can retain (or reclaim double) the caparra as liquidated damages. If the sale completes, the caparra is usually applied toward the purchase price. (Do not confuse with caparra penitenziale, a different type of deposit for option to withdraw).