Business Contracts

The right of retention allows a creditor who holds a thing belonging to his debtor to refuse its return until his claim has been paid in full. Article 1612 of the Civil Code confers this right on the seller when the price is due and the buyer does not yet hold the item. In effect, this provision states that the seller is not bound to deliver the thing if the buyer fails to pay the price, even thou …

Right of retention

The right of retention allows a creditor who holds a thing belonging to his debtor to refuse its return until his claim has been paid in full. Article 1612 of the Civil Code confers this right on the seller when the price is due and the buyer does not yet hold the item. In effect, this provision states that the seller is not bound to deliver the thing if the buyer fails to pay the price, even though the seller has not granted him any time-limit for payment. 

The reform of the law on securities by Ordinance No 2006-346 of 23 March 2006 established a general right of retention in Article 2286 of the Civil Code in favor of: the person to whom the thing has been delivered until payment of his claim; the person whose unpaid claim arises from the contract which obliges him to deliver the thing; the person whose unpaid claim arises from the holding of the thing; and the person who benefits from a security without dispossession.

The right of retention may be exercised on movable or immovable , tangible or intangible property, irrespective of its value, within the limits of economic, moral and political public policy. A car manufacturer having sold and delivered a vehicle to one of its dealers without receiving payment, has a legal right of retention on the administrative documents allowing the vehicle to be placed on the road, in accordance with Article 1612 of the Civil Code . 

However, the seller's right to retain the thing sold implies a claim due and payable. The right of retention under Article 1612 of the Civil Code is only possible in effect if the seller to whom the sale price has not been paid in full demonstrates that he has fulfilled his obligation to deliver by making the thing sold available . Partial non-payment does not give rise to any right of retention on the part of the seller, if it has not been established that the buyer had to pay the full price before delivery, which constitutes delivery in legal terms . On the other hand, the rejection of the seller's claim for rescission of the sale, and the condemnation of the purchaser and the co-principal to pay him a sum representing the balance of the sale price, do not prevent the seller from exercising his right of retention, in the absence of actual payment of the full price .

The seller must also be in possession of the item. The possession of the thing must be free of defects, and the seller must be acting in good faith. A person who holds the thing through fraud, duress or fault cannot validly exercise his right of retention . Nor can the seller exercise a right of retention on the thing if he has voluntarily divested himself of it . Thus, the owner of an aircraft who has mandated an undertaking to sell it, and who has received payment for the sale, is not entitled to exercise a right of retention on the administrative documents ancillary to the sale .

The right of retention is not severable. The seller of a vehicle for which the price has not been paid in full may retain the registration certificate until the price has been paid in full . Partial payment of the price by the buyer does not oblige the seller to deliver the vehicle or part of it. Retention also confers on the seller an accessory obligation to preserve the thing retained, which in the event of non-performance, incurs his liability . This obligation to preserve implies an obligation to take care of the thing retained, even though the right of retention relates to perishable goods. However, the seller may require the purchaser to reimburse the costs incurred in preserving the item . 

A right in rem, enforceable against all parties, including third parties not liable for the debt, the right of retention can be exercised for any claim arising from the thing retained . When the thing retained is an immovable, the enforceability of the right of retention is not subject to land registration . However, the right of retention is not without limits. It cannot be exercised abusively or wrongfully  and is lost through voluntary divestiture . The unpaid seller may therefore, without undue hindrance, retain the administrative documents of the vehicle sold, provided that his right of retention is enforceable against sub-purchasers and that the original purchaser is insolvent .  On the other hand, the claim of the owners of a parcel of land on which equipment belonging to the purchaser, who had gone into receivership, had been stored, and of which the vendor had regained ownership following lawsuit to that end, must be dismissed, as they are seeking the removal of the equipment and the payment of occupancy indemnities to the vendor on the grounds of an infringement of their right of ownership, since the latter was not the debtor of the sums owed by the purchaser in return for the occupation of their land, and that the infringement of property rights was the result of the exercise of their right of retention, despite the seller's attempts to recover the equipment and his proposals to pay the occupation indemnities from the moment he regained ownership .

Cass. com. 31 May 1994, LawLex202200003242JBJ: the car manufacturer who has sold and delivered a vehicle to one of its dealers without receiving payment, has a lawful right of retention on the administrative documents which allow the vehicles to be put on the road, in accordance with Article 1612 of the Civil Code.

CA Montpellier, 25 April 2017, LawLex202300003960JBJ.

Cass. 1re civ, 20 December 2017, LawLex202100003438JB.

Cass. 3e civ, 16 December 1998, LawLex202300002649JBJ.

Cass. 1st civ. 16 February 2022, LawLex202300004385JBJ.

Cass. 1re civ., 20 December 2017, overturning a decision by a court of appeal which, while ordering the seller to pay the purchasers of the equipment a sum in respect of occupancy charges calculated over the period during which he had regained ownership of the equipment, ordered the purchasers to pay him a sum in damages on the grounds that they had committed a fault against him by unjustly delaying the removal of the equipment. See in the same case: Cass. 1re civ. 16 February 2022, LawLex202300004385JBJ.

Cass. 1re civ. 24 September 2009, LawLex202200000202JBJ.

Cass. 1re civ, 16 February 2022, LawLex202300004385JBJ, even if the right of retention is a right in rem, enforceable against all, including third parties who are not liable for the debt, in particular by the person whose unpaid claim arose from the possession of the thing, it is lost as a result of voluntary divestiture.

Cass. 3e civ, 18 December 2012, LawLex202300003958JBJ.

Cass. com. 3 December 2003, LawLex202300011065JBJ: a seller who, in the knowledge that the vehicle sold had been stolen, had it returned to him by his buyer, cannot claim a right of retention against his own seller in the absence of peaceful possession.

CA Bordeaux, 3 March 2022, LawLex202300009900JBJ.

Cass. com, 28 January 2004, LawLex202300003963JBJ.

CA Bordeaux, 3 March 2022, LawLex202300009900JBJ, issued on the basis of Article 2286 of the Civil Code.

Cass. com, 12 May 2004, LawLex202300009005JBJ.

Regarding a bailment agreement: Cass. 1re civ. 7 November 2006, LawLex202300000604JBJ, holding that the right to retain goods until full payment in no way exempts the purchaser from taking the necessary steps to preserve them, with the possibility of claiming the related costs from the debtor.

Business Contracts

240. Right of retention

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Les notions juridiques connexes

240. Right of retention

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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