Retention of Title in Brazil

Guida pratica

Retention of title (also known as reservation of ownership) is a contractual mechanism whereby the seller retains ownership of goods until the purchase price has been fully paid. It is a widely used tool in both domestic and international trade to mitigate credit risk and protect sellers against buyer default. Although the concept of retention of title is broadly recognised, its legal treatment, enforceability, and practical implications vary significantly between legal systems. These differences are particularly evident in areas such as the recognition of ownership rights, the enforceability of clauses against third parties, and the treatment of goods in the event of the buyer’s insolvency or bankruptcy. This guide provides a practical overview of retention of title clauses and their regulation across multiple jurisdictions, addressing recurring key questions, such as

How retention of title is regulated under national law
The legal status of goods subject to retention of title in bankruptcy proceedings
The formal requirements for an enforceable retention of title clause
The possibility of including retention of title in framework or supply agreements
The registration or security mechanisms available to strengthen the seller’s position

BrasileLast update: 28 Settembre 2025

Does retention of title exist in Brazil?

Retention of Title is a contractual clause foreseen in article 521 of the Brazilian Civil Code used in instalment plan sale and purchase agreements for movable property, whereby the seller reserves ownership of the property until the buyer has paid the agreed price in full. In other words, even if the goods are delivered to the buyer, ownership will only be transferred once full payment has been made.

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What happens to retention of title where the buyer is in bankruptcy in Brazil?

As ownership is reversed to seller until the movable property is fully paid, in case o buyer’s bankruptcy, the property is not affected and will not belong to the bankruptcy estate, according to article 80 of the Brazilian Bankruptcy Law (Law no. 11/101/2005).

However, all formalities and conditions of the retention of title must have been met. In such case, the Seller can claim the property delivered, before the asset is sold in court or disposed of to the estate.

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What are the formalities needed for the enforcement of a retention of title clause in Brazil?

The formalities required for the retention of title to be enforced before third parties are:

express written clause in the agreement;
object that may be fully identifiable and characterized, in order to set it apart from other similar items (serial number, make, model, etc.); and
registration of the Agreement with the Registry of Deeds and Documents located at the buyer's domicile.

For registration of the Agreement, it must be either in Portuguese language or bilingual or sworn translated to Portuguese, by a sworn translator licensed in Brazil. As per signatures, it may be signed electronically, provided it is possible to clearly identify who signed it, provided the key or credential used in the signature is under the exclusive control of the user (such as biometrics, personal password, token, certificate, etc.).

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Can the retention of title be agreed in a framework contract between the parties or must the goods be specified?

The retention of title must specify and identify the movable asset sold, as stated in question 3(b) above. Hence, it is more commonly used for the sale of industrial, textile, agricultural, cutting and welding machinery machines, forklift trucks, IT, graphic or professional equipment, etc.

The use of a framework agreement is not common, but it could be used provided that for each specified and identifiable asset sold, an amendment to the agreement is signed and registered with the Registry of Deeds and Documents located at the buyer's domicile.

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How to enforce a clause of of retention of title in Brazil

The seller may only enforce the retention of title clause after the buyer has defaulted, by means of a protest of the title or judicial notification.

Once the buyer is in default, the seller may file a lawsuit to either collect the installments due and outstanding and any other amount owed or recover possession of the asset sold. Each option is subject to a different court procedure

In case of repossession of the asset, the seller may withhold the installments paid up to the amount necessary to cover the depreciation of the asset, the expenses incurred and other sums rightfully due. The surplus shall be returned to the buyer; and any outstanding amounts shall be collected from buyer.

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