On the last day of 2015, one of the Netherlands’ largest department stores has been declared bankrupt. V&D’s bankruptcy had negative consequences on various parties. For example on Senz, a supplier of storm umbrellas. Senz had supplied V&D with umbrellas of which a large part remained unpaid.
Right of recovery: legal means in case of non-payment
Payment is not a legal requirement for the transfer of an article. A buyer becomes the owner of a product if it is delivered on the basis of a purchase agreement by a competent seller. Through the supply, V&D became the owner of the Senz umbrellas.
Non-payment
What can a seller do in case of non-payment?
The legislation offers sellers the possibility to recover non-paid products through a written statement to the buyer. Sellers have a so-called right of recovery. This right may be asserted if the buyer does not fulfil his obligation to pay and is in default. A seller can legally be in default if the agreed term of payment expires or if the buyer informs the seller that he will not make any payments. Invoking the right to recovery results in the termination of the purchase agreement between the buyer and seller. Through the exercise of the right of recovery, Senz became once again the owner of the umbrellas and could claim them to be handed over. Moreover, a bankruptcy does not affect the right to recovery.
The right to recovery
The right to recovery cannot be invoked if the buyer has already sold the products to an unsuspecting third party. Therefore, it is advisable not to agree on long payment terms with buyers and to monitor these terms. Furthermore, it would be wise to give each individual item a mark, so it can be identified in case of a recall.
Result in interlocutory proceedings
In Senz’ case, the V&D curators refused to hand over the storm umbrellas to Senz. They stated that no distinction could be made between paid and unpaid umbrellas. In interlocutory proceedings, the judge in interlocutory proceedings ruled in Senz’ favour. In the end, V&D had to hand over the umbrellas to Senz. In short, every cloud has a silver lining.
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