# Right of retention

Source: https://contracko.com/glossary/right-of-retention

# Right of retention

A creditor right to withhold another property until a related claim is paid.

## Definition

The right of retention (retentierecht) lets a creditor who holds another party property suspend its duty to return it until a connected claim, such as for repair or storage, is paid. There must be sufficient connection between the claim and the obligation to return the item. The right can be invoked against the owner and, in defined circumstances, against third parties and even in bankruptcy, giving it real practical force.

## Example

> A garage may retain a repaired car until the customer pays the invoice for the repair work.

## Why this is a business risk

A creditor who fails to assert the right of retention before returning the asset loses the practical leverage it provides. Once the goods are back in the debtor's possession, recovery depends on legal proceedings rather than the ability to withhold. Wrongful retention, where the connection between the claim and the asset is insufficient, exposes the creditor to a damages claim by the owner.

## How to manage it

- Assert the right of retention in writing before returning any item while a connected claim remains outstanding, specifying the claim amount.
- Verify that sufficient connection exists between the retained item and the outstanding claim; retention for an unrelated debt is wrongful.
- Do not use or damage the retained item; the creditor is a custodian and owes a duty of care for the property in their possession.
- Notify the owner clearly in writing that retention is being exercised and the conditions for release.
- If the debtor is declared bankrupt, assert the right of retention immediately against the receiver before any inventory is taken.

### How Contracko helps

Contracko tracks outstanding payment obligations and the delivery or service milestones they relate to, giving creditors a clear picture of which obligations remain unpaid and whether a right of retention is likely to be available. This supports timely decision-making about whether to assert the right before an asset is released.

## Legal references

- [BW 3:290 Dutch Civil Code: right of retention 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

[Logistics & Distribution](https://contracko.com/industries/logistics)[Warehousing](https://contracko.com/industries/warehousing)[Construction](https://contracko.com/industries/construction-industry)[Manufacturing](https://contracko.com/industries/manufacturing)

## Related clauses

- [Retention of Title](https://contracko.com/clause-library/retention-of-title)
- [Payment Terms Clause](https://contracko.com/clause-library/payment-terms)

## Related terms

- [Retention of title](https://contracko.com/glossary/retention-of-title)
- [Pledge](https://contracko.com/glossary/pledge)
- [Right of suspension](https://contracko.com/glossary/right-of-suspension)
- [Payment default](https://contracko.com/glossary/payment-default)

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## Frequently asked questions

Common questions about this term.

- **Q:** What is the difference between a right of retention and retention of title?
  **A:** Retention of title is a seller right to keep ownership of delivered goods until paid. The right of retention is a creditor right to withhold returning someone else's property until a connected claim is satisfied. The key difference is ownership: under retention of title the seller never transfers ownership; under a right of retention the creditor holds property belonging to the debtor.

- **Q:** Can a right of retention be exercised against a third-party owner?
  **A:** Under BW 3:291, the right of retention can in certain circumstances be invoked against the owner of the goods even if the owner is not the party that owes the money, provided the connection requirement is met. This makes it a powerful tool in logistics and repair contexts.

- **Q:** Does a right of retention survive the debtor bankruptcy?
  **A:** Yes. Under Dutch law (BW 3:292) the right of retention can be invoked in bankruptcy. The creditor retains the right to hold the goods until paid, and ranks ahead of unsecured creditors from the proceeds of those specific goods.

- **Q:** Is there a duty of care for the retained property?
  **A:** Yes. The party exercising the right of retention holds the property as a custodian and must take reasonable care of it. Damage or loss caused by negligence during retention can give rise to a damages claim by the owner.

- **Q:** What connection is required between the claim and the retained item?
  **A:** Under BW 3:290, there must be a sufficient connection (voldoende samenhang) between the claim and the duty to return the item. Claims arising from costs incurred on the item itself (repair, storage, improvement) are the clearest cases. A general trade debt unconnected to the specific item is insufficient.

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