Natural Gas Company (Gas Company) and Yaowa Glass Company (Yaowa Company) entered into a supply contract. The major terms and conditions of the contract were that Gas Company would provide a minimum 4,000

of natural gas daily for a period of five years at a fixed price; it should give a written notice five days in advance where it reduces the quantity of supply; Yaowa Company would provide a sum of RMB 100,000 yuan as a deposit for the performance of the contract. Yaowa Company paid the deposit pursuant to the supply contract upon the conclusion of the contract.Gas Company has been in decline since the beginning of 2010. In order to achieve extra profit, Gas Company sold more natural gas to other customers at a higher price by reducing the quantity of supply to Yaowa Company. One day Gas Company suddenly stopped providing natural gas to Yaowa Company without a notice in advance, which resulted in serious damage to the equipment of the latter.Due to unsuccessful negotiation between the two parties, Yaowa Company intended to seek the assistance from the people’s court.Required:Answer the following questions in accordance with the relevant provisions of the Contract Law of China, and give your reasons for your answer:

(a) explain the legal nature of the deposit under the contract law, and state whether a claim for a refund of twice the amount of the deposit should be supported by the court; (4 marks)