"
"
It is now important to review and stress the fundamental
differences between the irregular deposit contract and the
loan contract, both with respect to money. As we will see later
in different contexts, much of the confusion and many of the
legal and economic errors surrounding our topic derive from
a lack of understanding of the essential differences between
these two contracts.
THE EXTENT TO WHICH PROPERTY RIGHTS ARE
TRANSFERRED IN EACH CONTRACT
To begin with, it is necessary to point out that the inability
to clearly distinguish between the irregular deposit and the
loan arises from the excessive and undue importance given to
the fact that, as we already know, in the irregular deposit of
money or of any other fungible good we may consider that the
ownership of the deposited good is transferred to the deposi-
tary, “just as” in the loan or mutuum contract. This is the only
similarity between the two types of contract and it has led
many scholars to confuse them without reason.
We have already seen that in the irregular deposit the
transfer of “ownership” is a secondary requirement arising
from the fact that the object of the deposit is a fungible good
which cannot be handled individually. We also know there are
many advantages to putting a deposit together with other sets
of the same fungible good and treating the individual units
indistinctly. Indeed, as one may not, in strictly legal terms,
demand the return of the specific items deposited, since this is
a physical impossibility, it may appear necessary to consider
that a “transfer” of ownership occurs with regard to the individ-
ual, specific units deposited, as these are indistinguishable from
one another. So the depositary becomes the “owner,” but only
in the sense that, for as long as he continues to hold the tan-
tundem, he is free to allocate the particular, indistinguishable
units as he chooses. This is the full extent to which property
The Legal Nature of the Monetary Irregular-Deposit Contract 13
rights are transferred in the irregular deposit, unlike the loan
contract, where complete availability of the loaned good is
transferred for the duration of the contract’s term. Therefore,
even given the one feasible “similarity” between the irregular
deposit and the monetary loan (the supposed “transfer” of
ownership), it is important to understand that this transfer of
ownership has a very different economic and legal meaning in
each contract. Perhaps, as we explained in footnote number
five, it would even be wisest to hold that in the irregular
deposit there is no transfer of ownership, but rather that the
depositor at all times maintains ownership over the tantundem
in an abstract sense.
FUNDAMENTAL ECONOMIC DIFFERENCES
BETWEEN THE TWO CONTRACTS
This variation in legal content stems from the essential dif-
ference between the two contracts, which in turn derives from
the distinct economic foundation on which each is based. Thus,
Ludwig von Mises, with his habitual clarity, points out that if
the loan
in the economic sense means the exchange of a present good
or a present service against a future good or a future service,
then it is hardly possible to include the transactions in ques-
tion [irregular deposits] under the conception of credit. A
depositor of a sum of money who acquires in exchange for it
a claim convertible into money at any time which will per-
form exactly the same service for him as the sum it refers to,
has exchanged no present good for a future good. The claim
that he has acquired by his deposit is also a present good for
him. The depositing of the money in no way means that he
has renounced immediate disposal over the utility that it
commands.
He concludes that the deposit “is not a credit transaction,
because the essential element, the exchange of present goods
for future goods, is absent.”14
14
Money, Bank Credit, and Economic Cycles
14Ludwig von Mises, The Theory of Money and Credit (Indianapolis, Ind.:
Liberty Classics, 1980), pp. 300–01. This is the best English edition of H.E.
Batson’s translation of the second German edition (published in 1924) of
Therefore, in the monetary irregular deposit there is no
relinquishment of present goods in favor of a larger quantity
of future goods at the end of a time period, but rather simply
a change in the manner of possessing present goods. This
change occurs because under many circumstances the depos-
itor finds it more advantageous from a subjective standpoint
(that is, more conducive to his goals) to make a monetary
irregular deposit in which the actual good deposited is mixed
with others of the same sort and treated indistinguishably
from them. Among other advantages, we have already men-
tioned an insurance against the risk of loss due to inevitable
accident and the opportunity to use the cashier services pro-
vided by banks to customers with a checking account. In con-
trast, the essence of the loan contract is radically dissimilar.
The aim of the loan contract is precisely to cede today the avail-
ability of present goods to the borrower for his use, in order to
obtain in the future a generally larger quantity of goods in
exchange at the end of the term set in the contract. We say
“generally larger” because, given the logical time preference
inherent in all human actions, which indicates that, other
things being equal, present goods are always preferable to
future goods, it is necessary to add to the future goods a dif-
ferential amount in the form of interest. Otherwise, it would
be difficult to find anyone willing to give up the availability of
present goods, which is a requirement of every loan.
Hence, from an economic viewpoint the difference
between the two contracts is quite clear: the irregular deposit
contract does not entail the exchange of present goods for
future goods, while the loan contract does. As a result, in the
irregular deposit the availability of the good is not transferred,
but rather the good remains continuously available to the
depositor (despite the fact that in a sense “ownership” has
been shifted from a legal standpoint), while in the loan con-
tract there is always a transfer of availability from the lender
to the borrower. Furthermore, the loan contract usually
includes an interest agreement, whereas in the monetary
Theorie des Geldes und der Umlaufsmittel, published by Duncker and Hum-
blot in Munich and Leipzig. The first edition was published in 1912.
The Legal Nature of the Monetary Irregular-Deposit Contract 15
irregular-deposit contract, interest agreements are contra natu-
ram and absurd. Coppa-Zuccari, with his customary insight,
explains that the absolute impossibility of including an inter-
est agreement in the irregular deposit contract is, from a legal
viewpoint, a direct result of the right granted the depositor to
withdraw the deposit at any time, and the depositary’s corre-
sponding obligation to maintain the associated tantundem con-
stantly available to the depositor.15Ludwig von Mises also
indicates that it is possible for the depositor to make deposits
without demanding any type of interest precisely because
the claim obtained in exchange for the sum of money is
equally valuable to him whether he converts it sooner or
later, or even not at all; and because of this it is possible for
him, without damaging his economic interests, to acquire
such claims in return for the surrender of money without
demanding compensation for any difference in value arising
from the difference in time between payment and repay-
ment, such, of course, as does not in fact exist.16
Given the economic foundation of the monetary irregular-
deposit contract, which does not imply the exchange of pres-
ent goods for future goods, the uninterrupted availability in
favor of the depositor and the incompatibility with an interest
agreement arise logically and directly from the legal essence
16
Money, Bank Credit, and Economic Cycles
15
Conseguenza immediata del diritto concesso al deponente di
ritirare in ogni tempo il deposito e del correlativo obbligo del
depositario di renderlo alla prima richiesta e di tenere sempre
a disposizione del deponente il suo tantundem nel deposito
irregolare, è l’impossibilità assoluta per il depositario di cor-
rispondere interessi al deponente. (Coppa-Zuccari, Il deposito
irregolare, p. 292)
Coppa-Zuccari also points out that this incompatibility between the
irregular deposit and the payment of interest does not apply, as is logi-
cal, to the completely separate case where interest is awarded because
the depositary fails to return the money upon request, thus becoming a
defaulter. As a result, the concept of depositum confessatum was, as we
shall see, systematically used throughout the Middle Ages as a legal ploy
to bypass the canonical prohibition on the charging of interest on loans.
16Mises, The Theory of Money and Credit, p. 301.
of the irregular deposit contract, which contrasts sharply with
the legal essence of the loan contract.17
FUNDAMENTAL LEGAL DIFFERENCES BETWEEN
THE TWO CONTRACTS
The essential legal element in the irregular deposit con-
tract is the custody or safekeeping of the money deposited. To
the parties deciding to make or receive an irregular deposit,
this is the most important aim or purpose of the contract,18and
it varies greatly from the essential purpose of the loan con-
tract, which is the transfer of the availability of the loaned good
to the borrower so he can use it for a period of time. Two other
important legal differences arise from this essential dissimilar-
ity in purpose between the two types of contract. First, the
irregular deposit contract lacks a term, the essential element
identifying a loan contract. Indeed, while it is impossible to
17The fact that interest agreements are incompatible with the monetary
irregular-deposit contract does not mean the latter should be free of
charge. Indeed, in keeping with its very nature, the irregular deposit
usually includes the stipulation of payment by the depositor to the
depositary of a certain amount for the costs of guarding the deposit or
maintaining the account. The payment of interest is a reasonable indi-
cation that the essential obligation of safekeeping in the irregular
deposit contract is almost certainly being violated and that the deposi-
tary is using the money of his depositors for his own benefit, misappro-
priating part of the tantundem which he should keep available at all
times to the depositors.
18J. Dabin, La teoría de la causa: estudio histórico y jurisprudencial, trans-
lated by Francisco de Pelsmaeker and adapted by Francisco Bonet
Ramón, 2nd ed. (Madrid: Editorial Revista de Derecho Privado, 1955),
pp. 24 and on. That the purpose of the irregular deposit contract is cus-
tody or safekeeping and is different from the object of the loan contract
is recognized even by authors who, like García-Pita or Ozcáriz-Marco,
still do not accept that the unavoidable, logical consequence of its pur-
pose of safekeeping is a 100-percent reserve requirement for bank
demand deposits. See José Luis García-Pita y Lastres, “Depósitos ban-
carios y protección del depositante,” Contratos bancarios (Madrid: Cole-
gios Notariales de España, 1996), pp. 119–266, and esp. 167–91; and Flo-
rencio Ozcáriz Marco, El contrato de depósito: estudio de la obligación de
guarda (Barcelona: J.M. Bosch Editor, 1997), pp. 37 and 47.
The Legal Nature of the Monetary Irregular-Deposit Contract 17
imagine a monetary loan contract without a fixed term (during
which not only is ownership transferred, but availability is lost
to the lender as well), at the end of which it is necessary to
return the tantundem of money originally loaned plus interest,
in the irregular deposit contract there is no term whatsoever, but
rather there is continuous availability in favor of the depositor,
who may withdraw his tantundem at any time.19The second
essential legal difference refers to the obligations of the two par-
ties: in the irregular deposit contract the legal obligation
implied by the nature of the contract consists, as we know, of
the conscientious custody or safekeeping (as would be expected of
a good parent) of the tantundem, which is kept continually avail-
able to the depositor.20In the loan contract this obligation does
not exist, and the borrower may use the loaned amount with
total freedom. Indeed, when we speak of the legal “transfer of
ownership” in the two contracts, we allude to two very dis-
similar concepts. Whereas the “transfer” of ownership in the
18
Money, Bank Credit, and Economic Cycles
19Civil law experts unanimously agree that a term is essential to a loan
contract, unlike an irregular deposit contract, which has no term. Manuel
Albaladejo emphasizes that the mutuum contract concludes and the
loan must be given back at the end of the term (for example, see article
1125 of the Spanish Civil Code). He even indicates that if a term has not
been explicitly designated, then the intention to set one for the debtor
must always be assumed, since a term is required by the essential nature of
the loan contract. In this case a third party (the courts) must be allowed
to stipulate the corresponding term (this is the solution adopted in arti-
cle 1128 of the Spanish Civil Code). See Albaladejo, Derecho civil II, Dere-
cho de obligaciones, vol. 2, p. 317.
20Clearly, it is the tantundem which is kept continually available to the
depositor, and not the same specific units deposited. In other words,
even though ownership of the concrete physical units deposited is
transferred and they may be used, the depositary does not gain any real
availability, since what he gains with respect to the specific units
received is exactly compensated by the necessary loss of the equivalent
availability regarding other specific units already in his power, and this
necessity stems from the obligation to keep the tantundem constantly
available to the depositor. In the monetary deposit contract, this con-
stant availability to the depositor is usually referred to by the expression
“on demand,” which illustrates the essential, unmistakable purpose of
the checking account or “demand” deposit contract: to keep the tantun-
dem continually available to the depositor.
differences between the irregular deposit contract and the
loan contract, both with respect to money. As we will see later
in different contexts, much of the confusion and many of the
legal and economic errors surrounding our topic derive from
a lack of understanding of the essential differences between
these two contracts.
THE EXTENT TO WHICH PROPERTY RIGHTS ARE
TRANSFERRED IN EACH CONTRACT
To begin with, it is necessary to point out that the inability
to clearly distinguish between the irregular deposit and the
loan arises from the excessive and undue importance given to
the fact that, as we already know, in the irregular deposit of
money or of any other fungible good we may consider that the
ownership of the deposited good is transferred to the deposi-
tary, “just as” in the loan or mutuum contract. This is the only
similarity between the two types of contract and it has led
many scholars to confuse them without reason.
We have already seen that in the irregular deposit the
transfer of “ownership” is a secondary requirement arising
from the fact that the object of the deposit is a fungible good
which cannot be handled individually. We also know there are
many advantages to putting a deposit together with other sets
of the same fungible good and treating the individual units
indistinctly. Indeed, as one may not, in strictly legal terms,
demand the return of the specific items deposited, since this is
a physical impossibility, it may appear necessary to consider
that a “transfer” of ownership occurs with regard to the individ-
ual, specific units deposited, as these are indistinguishable from
one another. So the depositary becomes the “owner,” but only
in the sense that, for as long as he continues to hold the tan-
tundem, he is free to allocate the particular, indistinguishable
units as he chooses. This is the full extent to which property
The Legal Nature of the Monetary Irregular-Deposit Contract 13
rights are transferred in the irregular deposit, unlike the loan
contract, where complete availability of the loaned good is
transferred for the duration of the contract’s term. Therefore,
even given the one feasible “similarity” between the irregular
deposit and the monetary loan (the supposed “transfer” of
ownership), it is important to understand that this transfer of
ownership has a very different economic and legal meaning in
each contract. Perhaps, as we explained in footnote number
five, it would even be wisest to hold that in the irregular
deposit there is no transfer of ownership, but rather that the
depositor at all times maintains ownership over the tantundem
in an abstract sense.
FUNDAMENTAL ECONOMIC DIFFERENCES
BETWEEN THE TWO CONTRACTS
This variation in legal content stems from the essential dif-
ference between the two contracts, which in turn derives from
the distinct economic foundation on which each is based. Thus,
Ludwig von Mises, with his habitual clarity, points out that if
the loan
in the economic sense means the exchange of a present good
or a present service against a future good or a future service,
then it is hardly possible to include the transactions in ques-
tion [irregular deposits] under the conception of credit. A
depositor of a sum of money who acquires in exchange for it
a claim convertible into money at any time which will per-
form exactly the same service for him as the sum it refers to,
has exchanged no present good for a future good. The claim
that he has acquired by his deposit is also a present good for
him. The depositing of the money in no way means that he
has renounced immediate disposal over the utility that it
commands.
He concludes that the deposit “is not a credit transaction,
because the essential element, the exchange of present goods
for future goods, is absent.”14
14
Money, Bank Credit, and Economic Cycles
14Ludwig von Mises, The Theory of Money and Credit (Indianapolis, Ind.:
Liberty Classics, 1980), pp. 300–01. This is the best English edition of H.E.
Batson’s translation of the second German edition (published in 1924) of
Therefore, in the monetary irregular deposit there is no
relinquishment of present goods in favor of a larger quantity
of future goods at the end of a time period, but rather simply
a change in the manner of possessing present goods. This
change occurs because under many circumstances the depos-
itor finds it more advantageous from a subjective standpoint
(that is, more conducive to his goals) to make a monetary
irregular deposit in which the actual good deposited is mixed
with others of the same sort and treated indistinguishably
from them. Among other advantages, we have already men-
tioned an insurance against the risk of loss due to inevitable
accident and the opportunity to use the cashier services pro-
vided by banks to customers with a checking account. In con-
trast, the essence of the loan contract is radically dissimilar.
The aim of the loan contract is precisely to cede today the avail-
ability of present goods to the borrower for his use, in order to
obtain in the future a generally larger quantity of goods in
exchange at the end of the term set in the contract. We say
“generally larger” because, given the logical time preference
inherent in all human actions, which indicates that, other
things being equal, present goods are always preferable to
future goods, it is necessary to add to the future goods a dif-
ferential amount in the form of interest. Otherwise, it would
be difficult to find anyone willing to give up the availability of
present goods, which is a requirement of every loan.
Hence, from an economic viewpoint the difference
between the two contracts is quite clear: the irregular deposit
contract does not entail the exchange of present goods for
future goods, while the loan contract does. As a result, in the
irregular deposit the availability of the good is not transferred,
but rather the good remains continuously available to the
depositor (despite the fact that in a sense “ownership” has
been shifted from a legal standpoint), while in the loan con-
tract there is always a transfer of availability from the lender
to the borrower. Furthermore, the loan contract usually
includes an interest agreement, whereas in the monetary
Theorie des Geldes und der Umlaufsmittel, published by Duncker and Hum-
blot in Munich and Leipzig. The first edition was published in 1912.
The Legal Nature of the Monetary Irregular-Deposit Contract 15
irregular-deposit contract, interest agreements are contra natu-
ram and absurd. Coppa-Zuccari, with his customary insight,
explains that the absolute impossibility of including an inter-
est agreement in the irregular deposit contract is, from a legal
viewpoint, a direct result of the right granted the depositor to
withdraw the deposit at any time, and the depositary’s corre-
sponding obligation to maintain the associated tantundem con-
stantly available to the depositor.15Ludwig von Mises also
indicates that it is possible for the depositor to make deposits
without demanding any type of interest precisely because
the claim obtained in exchange for the sum of money is
equally valuable to him whether he converts it sooner or
later, or even not at all; and because of this it is possible for
him, without damaging his economic interests, to acquire
such claims in return for the surrender of money without
demanding compensation for any difference in value arising
from the difference in time between payment and repay-
ment, such, of course, as does not in fact exist.16
Given the economic foundation of the monetary irregular-
deposit contract, which does not imply the exchange of pres-
ent goods for future goods, the uninterrupted availability in
favor of the depositor and the incompatibility with an interest
agreement arise logically and directly from the legal essence
16
Money, Bank Credit, and Economic Cycles
15
Conseguenza immediata del diritto concesso al deponente di
ritirare in ogni tempo il deposito e del correlativo obbligo del
depositario di renderlo alla prima richiesta e di tenere sempre
a disposizione del deponente il suo tantundem nel deposito
irregolare, è l’impossibilità assoluta per il depositario di cor-
rispondere interessi al deponente. (Coppa-Zuccari, Il deposito
irregolare, p. 292)
Coppa-Zuccari also points out that this incompatibility between the
irregular deposit and the payment of interest does not apply, as is logi-
cal, to the completely separate case where interest is awarded because
the depositary fails to return the money upon request, thus becoming a
defaulter. As a result, the concept of depositum confessatum was, as we
shall see, systematically used throughout the Middle Ages as a legal ploy
to bypass the canonical prohibition on the charging of interest on loans.
16Mises, The Theory of Money and Credit, p. 301.
of the irregular deposit contract, which contrasts sharply with
the legal essence of the loan contract.17
FUNDAMENTAL LEGAL DIFFERENCES BETWEEN
THE TWO CONTRACTS
The essential legal element in the irregular deposit con-
tract is the custody or safekeeping of the money deposited. To
the parties deciding to make or receive an irregular deposit,
this is the most important aim or purpose of the contract,18and
it varies greatly from the essential purpose of the loan con-
tract, which is the transfer of the availability of the loaned good
to the borrower so he can use it for a period of time. Two other
important legal differences arise from this essential dissimilar-
ity in purpose between the two types of contract. First, the
irregular deposit contract lacks a term, the essential element
identifying a loan contract. Indeed, while it is impossible to
17The fact that interest agreements are incompatible with the monetary
irregular-deposit contract does not mean the latter should be free of
charge. Indeed, in keeping with its very nature, the irregular deposit
usually includes the stipulation of payment by the depositor to the
depositary of a certain amount for the costs of guarding the deposit or
maintaining the account. The payment of interest is a reasonable indi-
cation that the essential obligation of safekeeping in the irregular
deposit contract is almost certainly being violated and that the deposi-
tary is using the money of his depositors for his own benefit, misappro-
priating part of the tantundem which he should keep available at all
times to the depositors.
18J. Dabin, La teoría de la causa: estudio histórico y jurisprudencial, trans-
lated by Francisco de Pelsmaeker and adapted by Francisco Bonet
Ramón, 2nd ed. (Madrid: Editorial Revista de Derecho Privado, 1955),
pp. 24 and on. That the purpose of the irregular deposit contract is cus-
tody or safekeeping and is different from the object of the loan contract
is recognized even by authors who, like García-Pita or Ozcáriz-Marco,
still do not accept that the unavoidable, logical consequence of its pur-
pose of safekeeping is a 100-percent reserve requirement for bank
demand deposits. See José Luis García-Pita y Lastres, “Depósitos ban-
carios y protección del depositante,” Contratos bancarios (Madrid: Cole-
gios Notariales de España, 1996), pp. 119–266, and esp. 167–91; and Flo-
rencio Ozcáriz Marco, El contrato de depósito: estudio de la obligación de
guarda (Barcelona: J.M. Bosch Editor, 1997), pp. 37 and 47.
The Legal Nature of the Monetary Irregular-Deposit Contract 17
imagine a monetary loan contract without a fixed term (during
which not only is ownership transferred, but availability is lost
to the lender as well), at the end of which it is necessary to
return the tantundem of money originally loaned plus interest,
in the irregular deposit contract there is no term whatsoever, but
rather there is continuous availability in favor of the depositor,
who may withdraw his tantundem at any time.19The second
essential legal difference refers to the obligations of the two par-
ties: in the irregular deposit contract the legal obligation
implied by the nature of the contract consists, as we know, of
the conscientious custody or safekeeping (as would be expected of
a good parent) of the tantundem, which is kept continually avail-
able to the depositor.20In the loan contract this obligation does
not exist, and the borrower may use the loaned amount with
total freedom. Indeed, when we speak of the legal “transfer of
ownership” in the two contracts, we allude to two very dis-
similar concepts. Whereas the “transfer” of ownership in the
18
Money, Bank Credit, and Economic Cycles
19Civil law experts unanimously agree that a term is essential to a loan
contract, unlike an irregular deposit contract, which has no term. Manuel
Albaladejo emphasizes that the mutuum contract concludes and the
loan must be given back at the end of the term (for example, see article
1125 of the Spanish Civil Code). He even indicates that if a term has not
been explicitly designated, then the intention to set one for the debtor
must always be assumed, since a term is required by the essential nature of
the loan contract. In this case a third party (the courts) must be allowed
to stipulate the corresponding term (this is the solution adopted in arti-
cle 1128 of the Spanish Civil Code). See Albaladejo, Derecho civil II, Dere-
cho de obligaciones, vol. 2, p. 317.
20Clearly, it is the tantundem which is kept continually available to the
depositor, and not the same specific units deposited. In other words,
even though ownership of the concrete physical units deposited is
transferred and they may be used, the depositary does not gain any real
availability, since what he gains with respect to the specific units
received is exactly compensated by the necessary loss of the equivalent
availability regarding other specific units already in his power, and this
necessity stems from the obligation to keep the tantundem constantly
available to the depositor. In the monetary deposit contract, this con-
stant availability to the depositor is usually referred to by the expression
“on demand,” which illustrates the essential, unmistakable purpose of
the checking account or “demand” deposit contract: to keep the tantun-
dem continually available to the depositor.
TABLE 1-1
ESSENTIAL DIFFERENCES BETWEEN TWO
RADICALLY DISTINCT CONTRACTS
Monetary Irregular Deposit
Monetary Loan
Economic Differences
1. Present goods are not
exchanged for future
goods.
2. There is complete, contin-
uous availability in favor
of the depositor.
3. There is no interest, since
present goods are not
exchanged for future
goods.
1.
Present goods are
exchanged for future
goods.
2. Full availability is
transferred from lender
to borrower.
3. There is interest, since
present goods are
exchanged for future
goods.
1.
The essential element
(and the depositor’s main
motivation) is the custody
or safekeeping of the tan-
tundem.
2.
There is no term for
returning the money, but
rather the contract is “on
demand.”
3.
The depositary’s obliga-
tion is to keep the tantun-
dem available to the
depositor at all times
(100-percent cash
reserve).
1.
The essential element is
the transfer of avail-
ability of the present
goods to the borrower.
2.
The contract requires
the establishment of a
term for the return of
the loan and calcula-
tion and payment of
interest.
3.
The borrower’s obliga-
tion is to return the
tantundem at the end of
the term and to pay the
agreed-upon interest.
Legal Differences
The Legal Nature of the Monetary Irregular-Deposit Contract 19
irregular deposit contract (which could be considered a
requirement of the fungible nature of the deposited goods)
does not imply a simultaneous transfer of availability of the
tantundem, in the loan contract there is a complete transfer of
ownership and availability of the tantundem from lender to
borrower.21The differences covered in this section are out-
lined in Table 1-1.
ESSENTIAL DIFFERENCES BETWEEN TWO
RADICALLY DISTINCT CONTRACTS
Monetary Irregular Deposit
Monetary Loan
Economic Differences
1. Present goods are not
exchanged for future
goods.
2. There is complete, contin-
uous availability in favor
of the depositor.
3. There is no interest, since
present goods are not
exchanged for future
goods.
1.
Present goods are
exchanged for future
goods.
2. Full availability is
transferred from lender
to borrower.
3. There is interest, since
present goods are
exchanged for future
goods.
1.
The essential element
(and the depositor’s main
motivation) is the custody
or safekeeping of the tan-
tundem.
2.
There is no term for
returning the money, but
rather the contract is “on
demand.”
3.
The depositary’s obliga-
tion is to keep the tantun-
dem available to the
depositor at all times
(100-percent cash
reserve).
1.
The essential element is
the transfer of avail-
ability of the present
goods to the borrower.
2.
The contract requires
the establishment of a
term for the return of
the loan and calcula-
tion and payment of
interest.
3.
The borrower’s obliga-
tion is to return the
tantundem at the end of
the term and to pay the
agreed-upon interest.
Legal Differences
The Legal Nature of the Monetary Irregular-Deposit Contract 19
irregular deposit contract (which could be considered a
requirement of the fungible nature of the deposited goods)
does not imply a simultaneous transfer of availability of the
tantundem, in the loan contract there is a complete transfer of
ownership and availability of the tantundem from lender to
borrower.21The differences covered in this section are out-
lined in Table 1-1.
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