Study On Title Retention On The Civil Code

In order to optimize the business environment and unify the rules of chattel security interest,the Civil Code has made major changes to the title retention.Formally,title retention contracts are stipulated in the contract part of civil code as a subtype of sales contracts and are subject to contract rescission rules.However,in terms of the establishment,implementation,and application rules of the title retention,legislators are more inclined to carry out the functionalism legislative model.In the context of functionalism,the ownership reserved by the seller is functionalized as real rights for security and the ownership of the seller is only in form.The substantial ownership has been enjoyed by the buyer.The buyer is entitled to have the right of secured property.The buyer’s payment of the full price or fulfillment of certain conditions only means that the seller’s rights of guarantee are extinguished.Accordingly,the buyer’s disposal of the subject matter is legitimate rights,which impedes the application of Article 642,paragraph 1,item 3 of the Civil Code.When the buyer transfers the subject matter,the provisions of Article 406 of the Civil Code shall be applied by analogy.The seller may pursue the subject matter but it should also be restricted by Article 404 of the Civil Code.When the title retention and other real rights for security are in competition,the priority rules shall be judged according to the principle of "publication first,rights first".If the ownership seller who finishes the registration after submitting the subject matter in 10 days will have the priority over other secured parties in the subject matter with the exception of the lien holders.