Retention of Title in Spain

Yes. Retention of title is recognised and enforceable under Spanish law. The clause allows the seller to retain ownership of the goods sold until the full purchase price is paid, even if the buyer has already taken possession and is using the goods.

Although the Spanish Civil Code does not expressly regulate retention of title, its legal validity is firmly established through case law and the general principle of freedom of contract, set out in Article 1255 of the Code. Spanish administrative authorities have even referred to it as “the most robust and efficient protection” available to sellers of movable goods.

In addition, Law 28/1998 on Installment Sales of Movable Goods provides a specific legal framework for retention of title clauses in sales of movable property. The mechanism is also explicitly mentioned in Law 3/2004 on combating late payment in commercial transactions, provided the clause has been agreed before delivery.

If the retention of title clause has been duly formalised and registered, it offers strong protection to the seller in insolvency proceedings. In such cases, ownership of the goods remains with the seller and the goods are excluded from the buyer’s bankruptcy estate. The seller can recover them directly, without needing to file a claim as an or ordinary creditor.

However, if the clause has not been registered, its effects are limited to the contractual relationship between the parties. In the event of bankruptcy, the clause is not enforceable against the insolvency administrator or other creditors. The goods are treated as part of the insolvent estate, and the seller’s only option is to claim the unpaid amount as an unsecured creditor—often with limited prospects of recovery.

Spanish law also protects good-faith purchasers. If the buyer sells the goods to a third party who is unaware of the retention of title and the clause is not registered, the seller cannot recover the goods. In that scenario, the only remedy is a contractual claim against the buyer.

To be valid and enforceable between the parties, the retention of title clause must be:

• Expressly agreed in writing,
• Signed by both parties, and
• Included in the contract before delivery of the goods.

This is sufficient to retain ownership as against the buyer, but not enough to enforce the clause against third parties, such as bankruptcy administrators or good-faith purchasers.

For the clause to be effective against third parties, two further requirements must be met:

1. The clause must be granted in a public deed (escritura pública). This is not a mere formality: the Registry of Movable Goods (Registro de Bienes Muebles) only admits documents in the form of public deeds. A simple private agreement is not eligible for registration, even if signed by both parties.
2. The clause must be registered in the Registry of Movable Goods, as required by Article 15.1 of Law 28/1998.

However, not all goods can be registered. Spanish law limits registration to individually identifiable movable goods, meaning the goods must be distinguishable from others of the same kind. Identification must be based on characteristics such as:

• Serial or manufacturing numbers,
• Brand and model,
• Vehicle registration or chassis number,
• Or any other unique attribute that allows clear differentiation.

Typical examples of registrable goods include vehicles, industrial machinery, and electronic equipment with a serial number.

By contrast, the following cannot be registered, and therefore cannot benefit from protection against third parties:

• Fungible goods (e.g. raw materials, consumables),
• Non-individualised items,
• Intangibles assets, as a general rule, and
• Preliminary or preparatory agreements.

In these cases, even a properly drafted clause will only be effective between the parties and offer no protection in insolvency proceedings or against good-faith purchasers.

Retention of title clauses can be included in framework agreements under Spanish law. A general clause may state that all goods delivered under the contract are subject to retention of title. However, this general reference is not sufficient for registration or for third-party enforcement.

For the clause to be effective beyond the contractual relationship, each delivery of goods must be:

• Individually documented (typically through invoices or delivery notes),
• Accompanied by clear identification of the specific goods delivered, and
• Registered separately in the Registry of Movable Goods.

The Spanish Directorate General of Legal Security requires that goods be “sufficiently identified and individualised” to be registrable. This presents practical limitations, especially in sectors involving bulk, perishable, or manufactured goods, where tracking individual items may be impossible or economically unfeasible.

In such cases, although the clause may remain enforceable between the parties, it will not offer any real protection in case of bankruptcy or onward sale of the goods. Alternative security mechanisms (such as pledges, guarantees, or advance payments) should be considered when dealing with goods that cannot be identified or registered individually.

Ultimately, understanding how retention of title operates in Spain means going beyond the clause itself. It requires careful attention to form, timing, and the nature of the goods involved. When all the conditions align—written agreement, proper formalization, and registration of eligible goods—this mechanism offers a powerful layer of legal protection.

But when used mechanically or without regard to its limits, it risks becoming a false safeguard. For businesses operating internationally, these nuances are not minor details—they’re the difference between having a right on paper and actually being able to enforce it.