Business Contracts

The validity of a retention of title clause is dependent on two conditions being met: it must have been agreed in writing, and accepted by the buyer. Article 2368 of the Civil Code provides that a retention of title clause must be agreed in writing  and Article L. 624-16, paragraph 2, of the Commercial Code stipulates that the clause must be in writing at the latest at the time of delivery. In eff …

Conditions of validity

The validity of a retention of title clause is dependent on two conditions being met: it must have been agreed in writing, and accepted by the buyer. Article 2368 of the Civil Code provides that a retention of title clause must be agreed in writing  and Article L. 624-16, paragraph 2, of the Commercial Code stipulates that the clause must be in writing at the latest at the time of delivery. In effect, the enforceability of a retention of title clause is subject to proof that the writing containing the clause predates or coincides with delivery . A retention of title clause appearing on a quotation and referred to in the debtor's purchase order, without reservation on his part  , or appearing on the front of invoices in bold type, the invoices being dated the same day as the delivery notes   will be considered to have been stipulated in writing.

It must be written in a clear, visible, legible and unequivocal manner  enabling the buyer to immediately understand it. This condition is not met in the case where the retention of title clause is on the back of delivery notes among the general terms and conditions of sale, in the same small print as the other provisions, and insofar as the single line highlighting the clause is not sufficient to attract the reader's attention, given the speed with which commercial transactions are carried out . The same applies to a clause appearing in the general terms and conditions attached by reference to delivery notes, in a manner that is not clearly identifiable . Where it affects property already owned by the purchaser, the retention of title clause must have been agreed in the contract of sale in order to be enforceable against third parties . Thus, the retention of title clause contained in the supplier’s general terms and conditions of sale, systematically appearing on the reverse side of invoices, on its website, and specifically in the general terms and conditions of sale signed by the purchaser - who therefore accepted it before delivery of the goods - is enforceable against a factoring company, even if the framework agreement signed between the parties did not mention the application of a retention of title clause, since its appendix stipulates that purchases made remain subject to the terms of the contract .

Acceptance of the clause is not subject to any particular formality. It can take a number of different forms, although no written form is required . It may be expressed by handwritten acknowledgement, signature or stamping by the undertaking on order or delivery slips . Acceptance may also be tacit, inferred from the buyer's behavior, such as the receipt of previous invoices containing the disputed reservation clause without protest , or the settlement of down-payment and balance payment invoices without any comment . On the other hand, the buyer's acceptance of the clause is not demonstrated when he has twice expressed his refusal to accept it, and the seller has delivered the goods without verifying his acceptance prior to delivery .

Civil Code, Art. 2368: “Retention of title is agreed in writing”; for an illustration, see CA Dijon, 18 January 2011, LawLex202300008288JBJ.

CA Toulouse, 22 September 2020, LawLex202300008292JBJ; CA Bordeaux, 1 September 2020, No 19/03639.

Cass. com. 13 April 1999, LawLex202100003403JBJ; see also: CA Bordeaux, 14 September 2015, LawLex202300008293JBJ, holding that the agreed retention of title clause is in compliance when it appears on the order form marked by the buyer at the time of delivery.

Cass. com. 31 January 2012, LawLex202100001651JBJ, holding that a company relying on the retention of title clause on its invoices to reclaim goods sold to a company in compulsory liquidation is within its rights, given that the two companies had been doing business for several months, that the debtor company had already received, at the time of its first unpaid invoices, five invoices clearly mentioning the retention of title clause, and that its performance of the contract implied its acceptance of said clause.

Cass. com., 2 November 2016, LawLex202100001661JBJ.

Cass. com. 10 December 1991, LawLex202200000163JBJ.

Cass. com. 3 January 1995, LawLex202100001726JBJ.

CA Bordeaux, 14 September 2015, LawLex202300008293JBJ.

CA Douai, 13 June 2013, LawLex202300008328JBJ.

Cass. com. 11 July 1995, LawLex202200000907JBJ.

Cass. com, 3 July 2012, LawLex202100003378JBJ.

Cass. com., 6 March 2024, LawLex202400002073JBJ.

Cass. com. 13 October 1998, LawLex202100003379JBJ.

Business Contracts

142. Conditions of validity

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Les notions juridiques connexes

142. Conditions of validity

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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