Anyone seriously interested in purchasing a parcel of land or a condominium unit is, in practice, often asked to sign a reservation agreement and to pay an initial deposit towards the purchase price or a reservation payment. The purpose of this arrangement is to reserve the property for the prospective purchaser until the actual sale and purchase agreement can be concluded. Such reservation agreements are regularly concluded in simple written form only, often for reasons of cost. If the principal contract is ultimately not concluded, the question arises whether the reservation agreement was validly concluded and what happens to any deposit already paid and to any contractual penalty that may have been agreed.