Retention of Title in Cross-Border Transactions in Lebanon

Lebanese law recognizes the concept of retention of title as a valid contractual device under the general principle of freedom of contract: a contract has the force of law between the parties and they may agree that ownership of delivered goods does not pass until full payment of the price.

There is no stand‑alone statute dedicated to Retention of title in Lebanon; the applicable anchors are the Code of Obligations (COC) and Contracts’ general contract rule, the Code of Obligations and Contracts’ title on sale (transfer of ownership and risk, rules on specific vs generic goods), the Code of Obligations and Contracts rules on conditions in obligations (supporting the characterization of ROT as a suspensive condition), and the Code of Obligations and Contracts provisions on assignment of receivables for proceeds clauses; for evidentiary matters between merchants and the practical operation of revendication against seizures; relevant provisions of the Commercial Code and the Code of Civil Procedure also apply. 

Under the Lebanese Law - Sale Contract, ownership of specific goods normally transfers by simple consent once the goods and price are agreed upon, and ownership of generic goods transfers when they are individualized or appropriated. A retention of title clause lawfully departs from these default rules by delaying the transfer of ownership until the condition precedent—full payment—is met. In legal doctrine, retention of title is viewed as a conditional transfer of ownership (a suspensive condition), not as a pledge or a security right.

However, the enforceability of retention of title against third parties is subject to general property rules for movable goods. Lebanese law protects a good-faith purchaser who acquires possession of movable property. Therefore, if the original buyer resells goods subject to retention of title to a third party who is in good faith and takes possession, the original seller usually loses ownership and can only claim money from the buyer.

On the opening of bankruptcy proceedings, individual enforcement is stayed and all actions are concentrated in the collective process (Lebanese Commercial Code). If a valid retention of title clause exists and, at the date of opening, the goods are still in the debtor’s possession, identifiable and separable, then the seller can seek revendication (recovery) on the basis that title never passed; practically, the seller submits the contract/retention of title, purchase documents, invoices, delivery notes, and identification evidence to the Receiver (who is the bankruptcy agent) and, if needed, petitions the court (Commercial Code - bankruptcy).

Lebanese law does not require notarization or registration for a standard retention of title clause; however, for it to be enforceable, the clause should be clear, in writing, and accepted by the buyer before delivery (COC on contract formation and evidence; Commercial Code on flexible evidentiary rules between merchants). The ROT must specify the goods to which it applies—the goods should be determined (or determinable) and individualized before any revendication—and they should also be “cited” in detail. 

In practice, the retention of title clause is placed in the master agreement and/or general terms, expressly accepted by the buyer, and referenced in order confirmations, invoices, and delivery notes. The sale must also specify a price that is determined or determinable, and the retention of title clause should expressly link transfer of title to full payment of its price.

Under Lebanese law, a retention of title (ROT) clause may be included in a general framework or master supply agreement, but for the clause to be valid and enforceable—especially against third parties such as the buyer’s creditors—the goods must ultimately be individually identified or at least objectively identifiable.

Lebanese law do not contain a specific statute regulating retention of title, but the principle is derived from the Civil Code rules on sale, ownership transfer, and specificity of subject-matter.

Ownership in movable goods transfers when the goods are determined and deliverable. 

Therefore, a retention of title clause in a general agreement is valid in principle, but it becomes legally effective only when the specific goods are later described, individualized, or made objectively determinable through purchase orders, delivery notes, invoices, or serial numbers.

Within the Lebanese legal framework, the absence of a unified public register for retention of title over movables compels sellers to rely on asset-specific registration and credit-support techniques to enhance opposability and reduce credit risk. For goods held in storage, warehouse receipts function as documents of title under the Commercial Code; maintaining control over these documents or taking a pledge over them can secure the seller’s position. In addition, a registered pledge over the buyer’s business at the Commercial Registry may improve recovery prospects as a secured creditor.

From a trade-finance perspective, instruments such as letters of credit, documents against payment, and bank guarantees are used to shift or mitigate payment risk. Where onward resale is contemplated, a proceeds-based enhancement—namely, a properly perfected assignment of receivables arising from the resale of ROT goods—can materially strengthen the seller’s position both pre- and post-insolvency, provided the assignment satisfies the Code of Obligations and Contracts requirements.