a consensual system since he parts with his property the moment that the contract of sale is concluded, thus well before receiving payment. Yet, this explanation is also not fully convincing. Under the systems which require delivery or even a separate real agreement, the transfer of ownership does no more depend on the payment of the price, at least in the absence of additional contract provisions. Such additional terms may likewise be used under French law, where the parties to the sales contract are at liberty to set aside article 1583 C. civ. Finally, statutory rights of the unpaid seller are not only known in consensual systems (France, Belgium, Italy) but also in Dutch law, which adheres to the necessity of delivery. On the other hand, there are consensual systems (e.g. Portugal) which do not grant the seller a special statutory protection.

The survival of the seller’s statutory rights which, as the national discussions have pointed out, are of limited practical value (with the exception of the Belgian privilège du vendeur) can perhaps best be explained by tradition or, in economic terms, by path dependency.

part (b)

Today, all European legal systems provide a mechanism for a contract to be terminated in the event of a material breach.163 One of the main differences between the systems under consideration, reflected in the answers to part (b), is the way in which such termination can be effectuated.164 French and Belgian law still principally require a court judgment whereas Italian law has adopted a more liberal attitude: the party who remained faithful to the contract is entitled to terminate the contract by a mere informal declaration. In France and Belgium, the necessity to obtain a judicial declaration can only be derogated from by inserting a duly framed ‘resolutive clause’ into the contract.

In the context of security rights, the termination of a sales contract on the ground of a material failure of performance, i.e. non-payment, is interesting in so far as ownership may automatically revert to the seller at the moment at which the contract comes to an end. One would expect that the solution which a legal system adopts in respect of this issue should -- inter alia -- depend on the general rules on transfer of property. Systems which are both consensual and causal165 can be expected to

163For a detailed comparative survey see Flessner, ZEuP 1997, 255.

164Ibid., 270 ff.

165As to the difference between abstract and causal systems, see also case 2.

228 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

conclude that ownership will ipso iure revert to the seller.166 The French, Belgian, Italian and Irish solutions conform with the assumption: ownership is automatically and retroactively revested in the seller. Finnish and English law,167 however, are out on a limb. Under the English Sale of Goods Act, ownership passes only with a valid contract and at the time when the parties intend it to pass. Hence, the English system may be termed both consensual and causal,168 at least in so far as sales contracts are concerned. Nevertheless, ownership would only automatically be revested in the seller if he was still in possession of the goods. A clause providing for the contract’s termination with real effect contravening this rule would be regarded as a charge and therefore be subject to the registration requirements under the Bills of Sale Acts, if the buyer were an individual, or under the Companies Act, if the buyer were a company.

Within an abstract system, ownership cannot be revested in the seller. Since the breach of contract can only affect the obligation, the real agreement remains intact. This is the solution adopted by German, Greek, Scottish and South African law.

In between the two are the traditio systems. On the one hand, the termination of the contract may destroy the basis of the transfer, taking effect at least from the moment of such termination. On the other hand, if delivery has taken place, one might take the view that redelivery is necessary for ownership to revert to the seller. Austrian, Spanish and Dutch law take the second view: termination of a contract on the ground of a breach is not accorded real effect. Swedish law, which as we have seen may be counted among the traditio systems, takes a different stand: if the seller has reserved the right to rescind the contract this has the same effect which under other jurisdictions is attributed to retention of title. For that reason it is also the only jurisdiction which confers real effect on a termination that is declared after the buyer has gone bankrupt, always provided that this right was reserved by the seller.

166The Italian report especially mentions the requirement that the goods have to still be present in the buyer’s hands. Although the French and Belgian reports do not say so specifically, it can be assumed that this requirement applies in France and Belgium alike.

167The solution of Scots law, applying the Sale of Goods Act, is similar to that of English law, although the starting point of Scots common law is distinct (‘principle of abstraction’).

168See Van Vliet, Transfer of Movables 111 ff.

With the exception of Swedish law,169 all systems that provide for a termination with real effect do not recognise its efficacy in the event of the buyer’s insolvency. Therefore, a resolutive clause which, in principle, is effective as against third parties cannot be termed a security right in a true sense. In practice, it played a (limited) role as a security right only in Belgium prior to the introduction of the validity in insolvency of reservation of title and the sellers’ preference.

part (c)

Since, on the facts of case 1(c), there is no special agreement between the buyer and the carrier, nearly all systems that require delivery for the transfer of ownership conclude that the seller is still the owner of those goods which are in the hands of the carrier.170 Vice versa, the consensual systems reach the conclusion that ownership has already passed to B when he goes bankrupt. If it is thought necessary to protect the seller in a situation such as that described in part (c), the need primarily arises within the consensual systems. Belgian, Italian, English, Irish and Finnish law seem to follow this line of thought. All five confer the right of stoppage in transit upon the seller who has already lost ownership when the goods are in the hands of a carrier. French law, on the other hand, seems to have no sympathy for the seller.

Of those systems that require delivery to the buyer in order for ownership to be transferred, and which do not let delivery to the carrier suffice, German, Dutch and Spanish law do not give the seller a special right to stop the goods in addition to his ownership. Greek and South African law, on the other hand, do grant the seller this additional protection. The existence of this right in South African law may be a legacy of English law, even though the underlying rationale for this right in England is not so clearly discernible in South Africa.

169And the Dutch recht van reclame which is, however, not to be equated with a resolutive clause.

170See for example the German report. Contrast the Austrian report which identifies an exception to this principle in certain circumstances.