Transfer of Risk with Reservation of Ownership Clause
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Transfer of risk, reservation of ownership, sales contract, burden of proof, restitution obligation, gross negligence, French Civil Code, Court of Cassation, contract law, commercial law
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Abstract
The Court of Cassation rules on the transfer of risk in a sales contract with a reservation of ownership clause, determining that risk transfer occurs simultaneously with ownership transfer.
Extract
[...] And finally, the selling company accuses the judges of the first instance of having violated the former article 455 of the Code of Civil Procedure by not responding to the conclusions they presented, stating a fault of imprudence of the imprudent buyer. The Court of Cassation is thus faced with the following question: can the transfer of risk take place within the framework of a sales contract containing a clause of reservation of ownership, even if the seller remains the owner of the thing? [...]
[...] Finally, it states that the Court of Appeal had just responded to the accusations, the minutes not having allowed to establish a fault of imprudence on the part of the purchasing company. The Court of Cassation thus indicates in the first place that the transfer of risk takes place at the same time as the transfer of ownership in the context of a clause of reservation of ownership in the sales contract and recalls the regime of application of the burden of proof in the matter of transfer of ownership and risk (II). [...]
[...] The Commercial Chamber's decision of the Court of Cassation of 19 October 1982 revisits this difficult articulation between the transfers of ownership and risk within the special framework of a sale contract with a clause of reservation of ownership. In this case, a company entered into a sale contract with another company for which it sold and delivered goods for which it received a down payment. The goods sold and delivered were lost in a fire caused in the premises of the purchasing company. [...]
[...] Plan : regime in part I and application of the regime in part II with burden of proof etc. I. La concomitance of the transfer of ownership and the transfer of risk The clause of reservation of ownership, obstacle to a transfer of risk The relative effectiveness of a risk transfer clause II. [...]
[...] The company that sold the goods then brought an action against the purchasing company to obtain payment of the balance of the price. No information was provided to us regarding the first instance decision, the Court of Appeal of Metz in a ruling of 29 October 1980 dismissed the selling company, estimating that this company was burdened with the quality of owner of the goods in application of the clause of reservation of ownership contained in the contract and that in fact the loss fell to it. [...]
