Late payment after delivery is one of the most damaging risks for businesses. Goods are supplied, value is transferred, yet payment does not follow. At that moment, the strength of your legal safeguards becomes decisive.
Two powerful—but often misunderstood—tools under Dutch law are retention of title and the right of reclamation. When used correctly, they significantly improve recovery prospects and reduce financial loss.
1. What is retention of title?
Retention of title means that ownership of delivered goods remains with the seller until full payment is received. The buyer holds possession, but not ownership.
This provides strong protection in cases of:
- non-payment
- insolvency
- third-party attachment
However, it only works if legally agreed in advance, usually via terms and conditions.
2. When does retention of title work?
It is enforceable only if:
- clearly included in contractual terms
- properly provided before or at contract formation
- goods remain identifiable
- goods have not been processed or resold
Many businesses assume protection where none legally exists.
3. Extended retention of title
An extended clause may cover:
- outstanding balances from previous deliveries
- interest and collection costs
- future claims
Precision in drafting is essential.
4. The right of reclamation
The statutory right of reclamation allows sellers to reclaim unpaid goods even without retention of title.
Key conditions:
- applies to movable goods
- must be exercised within six weeks after payment becomes due
- requires formal written notice
- expires upon processing or resale
Timing is critical.
5. Retention of title vs. right of reclamation
Used together, these instruments significantly strengthen recovery strategies—provided they are applied correctly and in time.
6. Common mistakes
We frequently see:
- invalidly incorporated terms
- vague retention clauses
- missed statutory deadlines
- insufficient delivery evidence
These errors often make recovery impossible.
7. Insolvency scenarios
In insolvency, valid retention of title may:
- exclude goods from the estate
- force curator cooperation
- give priority over unsecured creditors
Without it, recovery chances drop sharply.
8. Integrating legal safeguards into credit management
Strong organisations:
- standardise retention clauses
- track deliveries precisely
- act immediately upon default
- align finance, legal and collections
Legal protection must be operational, not theoretical.
Want to ensure your retention of title and reclamation rights actually protect your cashflow?
We assess, activate, and enforce legal safeguards as part of a complete collections strategy.
Contact us via WhatsApp, phone, e-mail, or our website.