Customers come in default of payment, may be in trouble and the seller. The protection offered by the retention of title. But what is behind it?
"The commodity remains until the complete payment property of the seller." This or similar phrase certainly reads any before. They are found, for example, in offers, order confirmations, delivery notes and invoices. "The correct application can save the entrepreneur from harm," said Bernd Drumann, Managing Director of Bremer collection. "I would even call, safety net 'for entrepreneurs and their businesses."
Definition and purpose
The retention of title referred to a special agreement in a contract of sale for "moving" things and states that the goods are indeed with delivery goes into the possession of the buyer, but the seller as long as the owner of the goods shall remain until it has been fully paid by the buyer, says Bremer collection. Only after payment of the invoice, the customer will also an owner. Thus the retention of title secures the seller upon completion of the purchase agreement, the ownership of the sold goods until full payment.
When and where?
"The agreement on the retention of title should definitely be taken already when concluding the contract," said Drumann. "It does not help much when there are the rules on the retention of title only on the invoice or on the delivery note. Although in a long lasting business relationship and the continued mention on invoices and delivery notes can also come here inclusion into consideration, but you should not rely on this better. Therefore, the scheme is part of offers and order confirmations "It is even better if the control is added to its own terms and conditions (Terms) and this on the back of quotations and order confirmations was. Connected to a front reference to the Conditions - would be published, so Drumann.
Terms and Conditions
"The terms and conditions you should definitely formulate carefully (let), know yourself and really understand their significance also - so not just from competitors or industry associations, write '- and make sure that the terms and conditions are also part of a closed themselves contracts "says Drumann.
How to withdraw from a contract, what to do in case of an insolvency of the buyer, which is an extended reservation of title and a case study, please read on the next page.
Withdraw from the contract
If the customer is in default of payment, you can withdraw (usually after a period) as the seller of the contract and demand the return of the goods. The course often makes sense only if the customer still in stock and has the goods also use it. Through the retention of title the seller can secure its access to the goods to other creditors, and sometimes even in the event of unauthorized resale to third parties.
Insolvency of the buyer
If there is a customer to a bankruptcy, the seller, according to Bremer collection is also covered if at the opening of insolvency proceedings or arrangement of a preliminary insolvency administration was still something of the delivered (unpaid) goods in stock. If the liquidator is not willing to pay the (unabridged) remaining purchase price, the supplier may also withdraw from the contract here and make a so-called right of separation asserted. It can then require the owner of the thing by the insolvency administrator to publish without having to participate as a creditor in the insolvency proceedings.
Extended Retention of Title
The extended retention of title means: The customer can return goods, although, as in the business world quite common already processed or resell, even if it is not fully paid for, but the supplier remains nevertheless hedged. At a processing of supplier purchases namely (possibly partly) the ownership of the newly manufactured thing, so Bremer collection. If the resale of the delivered goods or the new item made from her, he would certainly give up the property in it, but acquires in return (again, possibly partly) the customer's claims against the buyer.
"Then comes it at a customer to an insolvency", so white Drumann to report from experience, "you have a creditor who has secured the extended retention of title when concluding the contract, quite good cards. The insolvency administrator is indeed entitled to do so, (i.e. The processed goods or the demand from the resale) to exploit the so-called collateral through sale or redemption, but as well-secured clever creditors is to then satisfy from the proceeds from the other creditors. “However, the insolvency administrator must previously have to make a flat rate of 4 per cent of the proceeds as finding costs claimed and about 5 percent for cost recovery.
An example
"The fact that the security of the (extended) retention of title can retain customers in bankruptcy a contractor before the total loss of his claim, proves very clearly a case of the recent past," said Bernd Drumann, and reports:
"The end of 2013 we were commissioned by a client of the timber industry to implement a requirement of almost 34,000 euros with an insolvent customer. As our client had the simple and the extended reservation of title secured by contract, he did not have to completely write off its claims. After registration of the security interest of simple and extended retention of title with the insolvency administrator, our client was able to make a right of separation of the goods delivered by him and yet at the camp located at the customer goods law. Goods worth more than 10,000 Euro was our client retrieve so, "said Drumann on.
Also from the remainder of the total requirement of around 24,000 euros could Bremer collection realized at the beginning of this year, still more than 7,000 euros. "The debtor had already resold the goods supplied by our clients, but not yet paid goods in part. As our client had also secured the extended retention of title by contract, he was to meet from the retracted from the liquidator purchase price payments after deducting said (validation and recycling) costs above other creditors. "
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