# Retention of Title

Source: https://contracko.com/clause-library/retention-of-title

# Retention of Title

Lets a seller keep legal ownership of delivered goods until the buyer has paid in full.

## What it is

A retention of title clause provides that ownership of goods does not pass to the buyer on delivery but only once payment is complete. Until then the seller can reclaim the goods, which is a powerful protection if the buyer becomes insolvent.

## Why it matters

Without it, an unpaid seller is just one of many creditors in a bankruptcy. With it, the seller retains a property right in the goods themselves, dramatically improving recovery.

## How to apply it

- State clearly that title passes only on full payment of all sums due.
- Include an extended (verlengd) reservation covering processed or resold goods where enforceable.
- Require the buyer to store reserved goods identifiably and to insure them.
- Give the seller a contractual right of access to inspect and repossess the goods.

## Sample wording

> All goods delivered remain the property of the Seller until the Buyer has paid in full all amounts owed under this agreement.

## Negotiation tips

- • Buyers should limit the reservation to the specific invoice, not all outstanding debts.
- • Sellers should secure the broadest enforceable form, including proceeds of resale.

## Common pitfalls

- • Failing to keep goods identifiable, so the reservation cannot be enforced after commingling.
- • Relying on an extended reservation that exceeds what Dutch law actually permits.

### How Contracko helps

Contracko stores every delivery contract in a searchable repository, so you can instantly locate which agreements carry a retention of title. Its AI analysis flags whether the clause covers all outstanding debts or only the specific invoice, and smart reminders alert you when to check that reserved goods are still identifiable and insured.

## Legal references

- [BW 3:92 Dutch Civil Code: retention of title Dutch law](https://wetten.overheid.nl/BWBR0005291)

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.

## Relevant for

[Manufacturing](https://contracko.com/industries/manufacturing)[Logistics & Distribution](https://contracko.com/industries/logistics)[Retail & Wholesale](https://contracko.com/industries/retail-wholesale)[Food & Beverage Production](https://contracko.com/industries/food-beverage-production)

## Related clauses

- [Payment Terms Clause](https://contracko.com/clause-library/payment-terms)
- [Warranties Clause](https://contracko.com/clause-library/warranties)
- [Limitation of Liability Clause](https://contracko.com/clause-library/limitation-of-liability)
- [Purchase Obligation / Minimum Take](https://contracko.com/clause-library/purchase-obligation)

## Related terms

- [Counterparty](https://contracko.com/glossary/counterparty)
- [Breach of contract](https://contracko.com/glossary/breach-of-contract)
- [Liability](https://contracko.com/glossary/liability)

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## Frequently asked questions

Common questions about this clause.

- **Q:** Does retention of title survive the buyer's bankruptcy?
  **A:** Yes. Because title never passed, the goods generally fall outside the bankruptcy estate, subject to identification.

- **Q:** Can the seller reclaim goods that have been resold?
  **A:** Only with an extended reservation, and Dutch law limits how far such a claim can reach into proceeds or processed goods.

- **Q:** Must goods be stored separately for the reservation to work?
  **A:** Not always separately, but they must be identifiable as the seller's goods. Mixing them with identical goods from another supplier can destroy the reservation.

- **Q:** Does a retention of title need to be registered?
  **A:** No registration is required under Dutch law. The clause in the contract or general terms, communicated before or at delivery, is sufficient.

- **Q:** Can a buyer sell goods subject to retention of title to a third party?
  **A:** Normally only if the seller has permitted trading in the ordinary course of business. Without permission, the sale may give the third party ownership if they act in good faith.

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