Retention of title
A seller retains ownership of delivered goods until the buyer has paid in full.
Definition
Retention of title (eigendomsvoorbehoud) lets a seller deliver goods while keeping legal ownership until the buyer has paid the agreed price, and often any related claims. It gives the seller a strong position in the buyer insolvency, since the goods can be reclaimed rather than forming part of the bankrupt estate. The clause must be validly agreed before or at delivery and is frequently combined with an extended (chain) reservation.
Example
A supplier delivers machinery under retention of title and reclaims it when the buyer is declared bankrupt before paying.
Why this is a business risk
A retention of title clause that is not properly incorporated into the contract or the general terms, or that is agreed too late (after delivery), is void. Buyers who commingle delivered goods with their own inventory can extinguish the seller's title. Suppliers operating in multiple jurisdictions need to verify that retention of title is recognised and effective under the applicable law, since not all legal systems give it the same protection.
How to manage it
- Ensure the retention of title clause is in your standard terms and is validly communicated to the buyer before or at the time of delivery.
- Consider an extended reservation that covers not only the price of the specific goods but also all existing and future claims from the commercial relationship.
- Instruct buyers in writing not to process or co-mingle the goods before payment, and include this prohibition in the contract.
- In cross-border transactions, verify that retention of title is enforceable under the law of the country where the goods are located.
- Track outstanding invoices against identified goods in transit or at the buyer site, so you know which goods you can reclaim if default occurs.
Legal references
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.
Frequently asked questions
Common questions about this term.