Property law W3 (Transfer of Systems, Ownership, Third Party Protection)

My own

Transfer of ownership

• Ownership transfer requires the right of disposal, a valid title, and delivery (VIII-2:101 DCFR)

• DCFR establishes that transfer can occur without physical delivery if alternative possession transfer methods are used.

Protection of Bona Fide Third Parties

(VIII-3:101 DCFR)

• Transferees in good faith may retain ownership even if transferor lacked the right of disposal, protecting them against claims from the true owner.

Publicity Mechanisms

• Third-party protection

Essential for immovables, ensuring enforceability of claims over property.

Good Faith Acquisition

VIII-3:101 DCFR (third-party protection)

Protects transferees who acquire property without knowledge of defects in transferor's title, provided acquisition was in the ordinary course of business.

Original v Derivative Acquisition

• Original: new property right

• Acquisition: property right derived from predecessor

Consensual v Tradition System

• Consensual: transfer of ownership through only contract (Solo consensu rule)

• Tradition: transfer of ownership through contract and delivery (=effectuates it)

Causal v Abstact System

Causal

1. legal ground needed for valid transfer

2. avoidance / nullity of contract invalidates transfer

3. ownership remains with original party

Abstract:

1. validity of legal ground not needed for transfer

2. invalidity of contract does not invalidate transfer

3. ownership remains with transferred party if transfer act already performed

DCFR Transfer of goods

1. VIII - 2:101(1)

a. Exist

b. Transferable (no provision prohibiting it VIII - 1:301)

c. Right to transfer (if not met, can be recovered through VIII - 3:101)

d. Legal basis = contract of sale, etc. (if contract invalidated → VIII - 2:202)

e. Delivery / equivalence or agreement of when ownership will pass

2. VIII - 2:101(4)

3. VIII - 2:101(2)

4. VIII - 2:101(3) = principle of specificity

DCFR: Avoidance of transfer and multiple transfer

• Avoidance of Transfer: VIII - 3:101

• Multiple Transfer: VIII - 2:301

NL, DE and FR systems

• NL: tradition + causal (3:84)

• DE: tradition + abstract (929)

• FR: consensual + causal (1196)

Transfer of systems

three relevant elements, of which two or three are required for a valid

transfer:

› right of disposal

› legal basis (causa traditionis), usually a contract

› delivery

In general the right of disposal is essential, but exceptionally a transfer by a person without right of disposal can be valid.

Transfer of systems NL

According to Dutch law, all three elements are

required:

1. delivery

2. valid legal title

3. right to dispose

How can ownership be acquired?

• Original acquisition – ownership arises anew (e.g., production).

• Derivative acquisition – ownership derives from predecessor (e.g., transfer).

What are the elements required for a valid transfer of ownership?

1. Right of disposal

2. Legal basis (causa traditionis), usually a contract

3. Delivery

• Dutch law: all three required (Art. 3:84 DCC).

Example of consensual system and its rule?

• France, Art. 1196 CC: “Transfer occurs at the conclusion of the contract.”

• Creates an obligation to deliver but passes ownership immediately.

Example of tradition system and its rule?

• Germany, § 929 BGB: requires delivery + agreement on transfer of ownership.

• Dutch law: Art. 3:84 DCC – all three elements (delivery, title, disposal) needed.

How does DCFR regulate transfer of ownership?

• Art. VIII.-2:101 & VIII.-2:202 DCFR – ownership transfer requires right of disposal, valid title, and delivery (can be substituted by other possession methods).

What exceptions exist to abstract system rules?

• Fraud and duress (identity of defect)

• Parties can deviate from abstraction principle (ius dispositivum)

What is possession?

• Relationship with a thing, can be direct or indirect

• Recognized in DCFR (Art. VIII.-1:205-208), Dutch BW (Art. 107-108), German BGB (§§ 854, 868)

• Important for: transfer (delivery), presumption of ownership, acquisitive prescription

Possession in the DCFR

• Owner-possessor (Art. VIII.-1:206)

• Limited-rights possessor (Art. VIII.-1:207)

• Possession-agent (Art. VIII.-1:208)

Delivery in the DCFR

• Transfer of possession: Art. VIII.-2:104

• Delivery alternatives (Art. VIII.-2:105):

  • Goods already with transferee

  • Goods with third party on behalf of transferor

• Transfer without delivery possible via agreement (Art. VIII.-2:101)

Right of disposal

• Nemo plus iuris ad alium transferre potest (cannot transfer more than you have)

• Transferor must have right to dispose

• Owner generally has it; non-owners may have it (e.g., trustee in bankruptcy)

Third-party protection – general principle

• Disposal by a person without right to dispose is normally invalid

• Legal systems (Germany, France, Netherlands, England) provide protection for bona fide transferees

Third-party protection in the DCFR (Art. VIII.-3:101)

• Requirements:

  • Other elements of transfer fulfilled (Art. VIII.-3:101(1)(a))

  • Delivery or alternative delivery (Art. VIII.-3:101(1)(b))

  • Acquisition for value

  • Good faith (Art. VIII.-3:101(1)(d))

• Exceptions:

  • Stolen goods normally excluded (Art. VIII.-3:101(3))

  • Limited exceptions apply even for stolen goods