be applied to the lease of immovables a long time ago.58 The Finnish Supreme Court has quite recently, by a narrow majority, accepted the last-mentioned interpretation.59

Comparative observations

Part (a)

In all jurisdictions agreements such as the present one are regarded as perfectly valid leasing contracts and are commonly used for the financing of equipment. According to all legal systems, the lessor principally remains the owner of the computer and will be able to enforce his ownership should the lessee become bankrupt or should another creditor try to execute against the goods.

However, some jurisdictions require more than just a valid agreement between A and B. For example, in Greece and France, the leasing contract must be registered; otherwise the lessor’s ownership of the goods will not be enforceable as against third parties. In Greece and France, registration also prevents bona fide acquisition of ownership in the goods. In Italy, the rules relating to retention of title are partly extended to leasing contracts. Therefore, the lessor will not be able to claim ownership of the goods as against third parties unless the contract is in writing and bears a ‘certain date’ (data certa) prior to insolvency or execution. Other means of proving that the contract is a leasing contract and that the lessor has remained the owner of the goods will not be admitted by the courts. In Belgium, leasing companies also must observe a number of requirements when establishing and performing leasing contracts, such as, for instance, the marking of the goods. However, non-compliance does not render invalid either the contract or the lessor’s rights in the goods. The rules are only of an administrative nature: companies which do not observe them might lose their entitlement to engage in the leasing business.

Part (b)

If finance leasing is regulated by statute, the statute usually contains a provision to the effect that the lessee must be given the option to purchase the goods on the expiration of the lease. This is the case in

620 s e c u r i t y r i g h t s i n m o va b l e p r o p e r t y

Greek, Portuguese, French and Spanish law. If finance leasing is not regulated by statute, it is normal commercial practice to include such an option for the benefit of the lessee (Germany, Italy, South Africa, Sweden).

Often, the question of whether the parties have included a purchase option or whether ownership will automatically vest in the lessee at the end of the rental period will be relevant to the characterisation of the contract. According to Dutch, Swedish and Finnish law, a clause that transfers ownership automatically to the lessee will render the contract a hire-purchase agreement under which both lessor and lessee are somehow regarded as owners; the first under a resolutive condition, the second under a suspensive condition. Other jurisdictions regard a purchase option as an essential element of a leasing contract. This is not only the case under Greek, Portuguese, French and Spanish law, where the purchase option is accorded to the lessee ex lege, but it is also true for Belgium and South Africa. On the other hand, there are a number of legal systems which take the opposite view, that an option to buy the goods makes the agreement one of hire purchase (England, Ireland, Scotland) or makes it begin to approximate an instalment sale under retention of title (Italy, Denmark, Sweden, Finland), provided that the price is significantly lower than the expected residual value of the goods. Under the Nordic systems, such a characterisation may lead to difficulties if the lessee is permitted to resell the commodity prior to full payment (see Swedish report and case 4). Otherwise, it does not seem to make any practical difference if the contract is considered to be one of hire purchase (see English, Irish and Scots reports). In some jurisdictions the exact nature of the contract may also have consequences for the applicability of consumer legislation, especially legislation enacting the EU Directive on consumer credit.60

Part (c)

Finance leasing, especially sale and lease-back transaction, can evidently perform the same economic function as that served by a secured loan. In jurisdictions which prohibit or limit the use of non-possessory security

60 Council Directive of 22 Dec. 1986 for the approximation of the laws, regulations and administrative provisions of the Member States concerning Consumer Credit 87/102/EEC, O.f. 1987 L 42/48.