Retention of Title by the Seller in Cases of the Buyer's Insolvency

• Authors: Julija Kiršienė
• Languages of publication: EN

Abstracts

EN

The article analyzes the regulation and application of the retention of the title clause. Uncommon in Lithuania, though widespread in other countries, retention of the title clause is a measure for securing obligations in wholesales. In the first section of the article the concept of retention of the title clause is outlined and discussed. Although the Civil Code of the Republic of Lithuania stipulates that retention of title could be vested only in goods, the parties can agree on a so-called "enlarged" or "prolonged" retention of the title clause. The second section of the article deals with the formal requirements, such as content, form, registration, etc. for validity of reservation of title clause in Lithuania. Following this, the issues of qualification and the legal consequences of the buyer's titles to goods in which ownership is reserved by the seller are discussed. The buyer under sale agreement may enjoy different models of titles: trust, agency, and transfer of future claims. The administration and consequences of these models are discussed in detail in the third section of the article. The final segment of the article deals with the issue of the consequences of the retention of title clause in the event of the buyer's insolvency. The consequences may differ depending on the chosen model of buyer's title. Since the purpose of the reservation of title clause is to have priority over other creditors (even secured), the comparative analysis of the legal consequences of reservation of title clause and legal pledge is presented in this final section of the article.

Keywords

EN

Retention of title clause; insolvency; legal pledge; legal title

• Publisher: Sciendo
• Journal: Baltic Journal of Law & Politics
• Year: 2009
• Volume: 2
• Issue: 1
• Pages: 1-17

Dates

published

2009-01-01

online

2009-06-22

Contributors

author

Julija Kiršienė

• Department of Private Law, Vytautas Magnus University Faculty of Law, Lithuania

References

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• Yeo V. C. "Visiting an old friend - the "Romalpa" clause." Singapore Academy of Law Journal 9 (1997): 250-274.
• Civil Code of the Republic of Lithuania. Official Gazette, 2000, no. 74-2262.
• Directive 2000/35/EC of the European Parliament and of the Council of 29 June, 2000, On Combating Late Payment in Commercial Transactions. Official Journal (L 200) 35 (EC).
• European Commission v. Italy. ECJ (European Court of Justice) case C-302/05. Official Journal C 229, 17/09/2005.
• J. B. v P. B. The Supreme Court of the Republic of Lithuania, 2004, no. 3K-3-425/2004.
• L. E. enterprise v bailiff A. B., UAB "Jūsų Aušrė", UAB "Mineraliniai vandenys". The Supreme Court of the Republic of Lithuania, 2004, no. 3K-3-146/2004.

Identifiers

DOI

10.2478/v10076-009-0001-0