You might be wondering…

“Is it enough that we simply included a retention of title clause in the contract?”
“Why do I need certified signatures if I trust the buyer?”
“When does retention of title also protect against seizure by creditors or insolvency?”

My clients often ask…

“I deliver machines on installment-like payments – how do I protect myself against the buyer’s creditors?”
“If we agree on retention of title only in a standard contract, will courts respect it in enforcement proceedings?”

What the law says in a nutshell

• § 2134 Civil Code: Retention of title is effective against the buyer’s creditors only if agreed in the form of a public deed (notarial deed), or in writing with officially certified signatures of both parties.

• The effects arise only from the date of certification of the signatures.

• For assets registered in a public register (e.g. real estate, certain movables), the retention clause must also be recorded in the register.

Practical significance of the rule

• Without certified signatures: Retention of title is valid only between the parties, but does not protect the seller against third parties. If the buyer’s creditors seize the goods, the seller may lose them.

• With certified signatures or public deed: Retention of title is also effective against creditors – the goods are not part of the buyer’s insolvency estate and cannot be seized in enforcement proceedings.

Common mistakes in practice

• Entrepreneurs agree on retention of title only in their general terms and conditions without certified signatures – ineffective against creditors.

• Parties rely on an oral agreement or simple signatures – useless in execution or insolvency.

• Sellers forget that the effect only arises from the date of certification – until then, their protection is weak.

How to proceed correctly

1. If you supply valuable goods on installments, include a written retention of title clause.

2. Arrange for officially certified signatures of both parties (e.g. at a notary or CzechPOINT).

3. For assets in a public register (e.g. land register), also arrange for the clause to be recorded.

4. Keep a copy of the contract ready for any dispute with creditors.

Practical examples

• A supplier of machinery had retention of title only in general terms – the machine was included in the buyer’s insolvency estate.

• A car seller agreed on retention of title with certified signatures – the bailiff could not seize the car, as ownership remained with the seller.

Why relying on a “gentleman’s agreement” is dangerous

Without certified signatures or a notarial deed, retention of title is only binding between the parties. The buyer’s creditors are not required to respect it. This can be fatal, especially if the buyer faces insolvency or enforcement.

Lawyer’s recommendation

I recommend that sellers always invest in a notarial deed or certified signatures – it is a cheap insurance policy against huge losses. I advise buyers to carefully review contracts – retention of title can limit their ability to dispose of the goods until the full price is paid.

FAQ

Is retention of title in a standard contract enough?
No, it is ineffective against creditors.

What is a public deed?
Typically, a notarial deed.

When does retention of title become effective against creditors?
From the date of certified signatures, or by registration in the relevant public register.