Securing against risks of insolvency by retention of title in Germany

By Dr. Angelika Baumhof and Christian Pflaeger, Jakoby Dr. Baumhof

Do you deliver goods to Germany and want to avoid that your pecuniary claims are as good as totally lost when the customer becomes insolvent before he has paid the bill?

An extended and expanded retention of title with a processing clause under German law agreed to at the right time are important means of security and could be a solution. On time means that such an agreement is either already included in your General Terms and Conditions or agreed upon individually together with the acceptance of the order of the goods.

The simple retention of title only helps you to retrieve your goods as long as they are still separate and identifiable from all the other goods of the debtor. Once the debtor has sold the goods, only an extended retention of title transfers the claim the debtor holds against the third party to you. These transferred claims are worthless debts of the insolvency assets, but you have the right of separate satisfaction. An expanded retention of title even has the effect that all claims resulting from your business relationship with the debtor are secured (you remain the owner of the delivered goods respectively and you have the right of separate satisfaction in the case of insolvency).

However in case the delivered goods are processed or transformed and therefore new items are created you  will lose ownership even when you have an extended and expanded retention of title. In this case a processing clause helps to get pro rata property rights of the new item.

If you deliver goods to Germany mind an effective protection of your property under German law!


Dr. Angelika Baumhof
Jakoby Dr. Baumhof, Rothenburg o.d.T., Germany
T: +49 9861 9405 0
E: This email address is being protected from spambots. You need JavaScript enabled to view it.; W: www.jakoby-baumhof.de

 

 

 


Christian Pflaeger
Jakoby Dr. Baumhof, Rothenburg o.d.T., Germany
T: +49 9861 9405 0
E: This email address is being protected from spambots. You need JavaScript enabled to view it.; W: www.jakoby-baumhof.de

 

 

 

 


published: October 2014

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