PhD cum laude for Emil Verheul

On Thursday 11 January, Emil Verheul, lecturer in Private Law and Notary Law, defended his PhD thesis entitled 'The retention of title clause'. For this he was awarded a cum laude distinction,– an exceptional achievement in the Groningen Law Faculty.

The retention of title clause is an important clause in commercial transactions. On the one hand, the clause establishes that the seller does not lose his right of ownership until the buyer pays the purchase price. On the other hand, the clause also realizes that the buyer can already use the sold thing and that the buyer, without any further action,  becomes owner of the sold thing at the time that he pays the purchase price. In the Dutch doctrine, however, uncertainties exist about the character of the retention of title clause: Isn’t the reservation of ownership in fact a security right? Why do parties not have to comply the requirements for establishing a security right and why do the rules for security rights not apply to the retention of title clause? What is the position of the seller and buyer during the period in which it is not yet clear whether the buyer actually pays the purchase price?

This dissertation emphasizes on the embedding of the retention of title clause in the contract of sale. The clause underlines the reciprocal character of the contract of sale: the seller only wants to transfer the sold thing, if the buyer pays the purchase price; the buyer only wants to pay the purchase price, if he becomes owner of the sold thing. This character of the retention of title clause as expression of the ‘quid pro quo’ principle makes clear that the reservation of ownership is not a security right: the seller merely (partially) postpones his obligations from the sales contract, in order to ensure that he does not lose his right of ownership, in the event that the sales contract is not fulfilled.

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This article was published by the Faculty of Law.

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