Your French Customer Went Into Receivership. Does Your Retention of Title Clause Still Work?
A retention of title clause is the most reassuring paragraph in most export contracts. It is also one of the least tested. It sits in the terms and conditions for years, and the first time anyone reads it closely is the morning a French customer announces a redressement judiciaire.
If you sell to French companies from the UK, the US or elsewhere in Europe, this guide sets out what French insolvency law actually requires to turn that clause into goods or money, and the two deadlines that decide whether you get either.
Can you walk through your own clause, step by step?
Most finance teams are sure they can, until they try. Before reading on, answer five questions about your clause: was it agreed in writing before the goods were delivered? To whom do you send the claim? By what date? Are the goods still at the customer's premises, unsold and identifiable? And what happens to the rest of the invoice?
If you hesitate on two or more, you are in good company, and you are also exactly where the deadlines below do their damage. French insolvency procedure does not wait for foreign creditors to work out the answers, and nobody sends a reminder.
When is a retention of title clause valid in France?
The clause must have been agreed between the parties in writing no later than delivery. In practice that means it must appear in a document the customer accepted before or at delivery: a signed order confirmation, a framework agreement, or general terms the customer demonstrably accepted. A clause printed only on the invoice, which arrives after the goods, is generally not enough.
The clause must also make the transfer of ownership conditional on full payment of the price. Most standard export clauses do. The weak point is almost never the wording; it's the timing and the proof of acceptance.
How long do you have to reclaim goods in a French insolvency?
Three months from the publication of the opening judgment in the BODACC, France's official commercial gazette. The deadline applies whether you are in Lyon or in Leeds, and it runs from publication, not from the day you hear the news. Nobody writes to tell you it has started.
The claim (demande en revendication) goes by registered letter with acknowledgment of receipt to the court-appointed administrator, or, if there isn't one, to the debtor. The administrator then has one month to agree. If there is no agreement within that month, you must apply to the insolvency judge (juge-commissaire) within the following month, or the claim is lost.
What if the goods have been sold, mixed or used?
The goods must still exist in kind when the proceedings open, which is why the administrator's opening inventory matters. Interchangeable goods (the same product, same quality) can be claimed against equivalent stock held by the debtor. Goods incorporated into something else can be claimed only if they can be separated without damage.
If the customer resold the goods and its own buyer hasn't paid yet, your claim can transfer to that unpaid resale price. This is one of the most valuable and least used parts of French retention of title law, and it also depends on acting within the deadlines.
Do you still need to declare your claim in a French insolvency?
Yes. Reclaiming goods and declaring a claim are two different procedures with two different recipients. The claim for the unpaid balance goes to the creditors' representative (mandataire judiciaire) within two months of the BODACC publication, extended by two months for creditors based outside metropolitan France. A claim for the goods does not replace it.
Known creditors are normally notified, but relying on that notice is how foreign creditors end up applying for relief from a missed deadline. Diarise both dates the day the judgment is published.
| Step | Send to | Deadline | If you miss it |
|---|---|---|---|
| Claim the goods (revendication) | Administrator (or the debtor if none), by registered letter | 3 months from BODACC publication | You lose the right to recover the goods in kind |
| Administrator's answer | — | 1 month from receipt | No agreement means you must go to the judge |
| Apply to the juge-commissaire | The insolvency court | Within 1 month after the answer period | The claim is barred |
| Declare the unpaid claim | Mandataire judiciaire | 2 months from BODACC; 4 months if outside metropolitan France | Excluded from distributions unless relief is granted |
Will the administrator return the goods or pay for them?
Often, they pay. In a receivership the business usually keeps trading, and your stock may be exactly what it needs to sell. French law allows the claim to be settled by paying the price immediately, and the judge can approve a payment term if you agree. For a supplier, a prompt payment for goods already in the customer's warehouse is frequently a better outcome than a lorry trip to collect them.
That negotiation only exists if your claim was valid and on time. Late or undocumented, the same goods simply become part of the estate.
What should you do this week?
Pull the signed order confirmations or framework agreement that carry your clause, not the invoices. Find the BODACC publication date and diarise day 90 and the claim-declaration deadline. Ask for the administrator's details and the opening inventory, and match your delivery notes against it by product and batch. Then send the registered letter, in French, with the evidence attached.
If a French customer of yours has just entered insolvency proceedings, tell us today; the deadlines start whether or not anyone tells you. We work with people on the ground in France, on a no cure, no pay basis. Contact us.