The Nature and Effects of the Retention of Title Clause in Modern French Law with Reference to Iranian Law

Document Type : Academicm and Research

Author

Private Law Department, University Law, Religions and Sects University, Qom, Iran

10.22091/csiw.2026.15648.2781

Abstract

The retention of title clause is an important legal mechanism in credit transactions whereby the seller retains ownership of the sold goods until the full payment of the price is made. This clause is used to reduce the risk of non‑payment and to protect the seller in contractual relationships, particularly in commercial transactions. In French law, this institution is expressly provided for in Articles 2367 to 2372 of the Civil Code and is recognized as a mechanism for securing the payment of the price. In contrast, Iranian law does not contain a specific statutory provision on this matter, and its validity and effects are primarily explained through general principles of contract law and doctrinal legal analysis.This research adopts a descriptive and analytical method with a comparative approach to examine the legal nature and effects of the retention of title clause in the legal systems of Iran and France. The findings indicate that in French law this clause has a nature closely resembling a proprietary security and produces clear legal effects with regard to the transfer of ownership, the transfer of risk, and the buyer’s bankruptcy. In Iranian law, however, its legal nature remains a matter of debate, and it is generally analyzed either as a suspensive condition affecting the transfer of ownership or as a condition producing legal effect (condition of result). The comparative analysis demonstrates that the explicit recognition of this legal institution can play an important role in enhancing transactional security and in protecting sellers in credit transactions.

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