Why is it important to stipulate in a contract the clause regarding the moment when the ownership right is transferred?

• Does your firm produce goods that you sell on the market?

• Do you distribute goods, making the link between the manufacturers and the consumers?

If that is the case, this article will interest you.

The clause regarding the “ownership reserve” proves its importance when you have claims resulting from the selling of goods, but your debtor is bankrupt.

In order to provide a better explanation for why is it important to stipulate in the contract a clause that refers to the moment when the ownership right is transferred I propose a concrete example.

Let us assume you are a laptop distributer. You have bought these laptops directly from the manufacturer and paid the price for them, the products becoming your property.

You intend to sell the products to a specialized retailer, who will sell the products to the final consumers.

Before signing the sale purchase contract with the retailer you ought to take every safety precautions in order to ensure your debt collection.

According to the legal provisions in force, the ownership right, in this case, is transferred to the buyer at the conclusion of the sale purchase contract, even though you haven’t delivered the goods and the price hasn’t been paid.

To avoid the transfer of the ownership right to the buyer without him paying the price you must introduce in the contract a clause that stipulates expressly that the transfer of property takes place only when the price has been paid in whole.

This clause bears the title of “ownership reserve” and it is regulated in art. 1684 Civil Code.

Be careful, even if you introduce this clause in the contract, in order for it to be enforceable against third parties (other people, but for contract parties), additional publicity formalities are necessary. For this, you must register in the Electronic Archive of Mobiliar Warranties in order to avoid your goods to be resold to another person without them even knowing the goods they are buying are in fact your property.

Let us assume you find yourself in the situation where your buyer has not paid the price of the contract and you must recover your debt from him but you find out he is bankrupt.

Because you have the ownership reserve clause and because you registered your contract in the Electronic Archive of Mobiliar Warranties, you have the right to recover your goods by addressing the competent court.

In case you have additional questions, please find me available on my e-mail address.

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