EFFECTS OF REQUIREMENT TO RETAIN OWNERSHIP TOWARDS THIRD PARTIES IN ACCORDANCE WITH LAW NO. 20 OF 2018 ON SECURING RIGHTS TO MOVABLE FUNDS: Comparative Study

Abstract

The sold product remains in the hands of the buyer under the condition that the seller retains ownership of the thing sold may cause a third party to deal with the debtor with this movable property without knowing that the seller retains ownership of the item sold. Therefore, the legislator found a way to remove this ambiguity, alert the third party, and protect them with this condition.

This is done by entering the condition in the register prepared for that (discloser) within the Jordanian legislative system. As a matter of principle, the Jordanian legislator considered the registration of legal behaviors as a pillar of these actions when the law requires it and its violation results in nullity. However, the Jordanian legislator deviated from this principle, took the idea of enforceability of the legal disposal, and divided it into internal enforcement between the parties to the removal and external enforcement towards third parties. It made the registration a means of enforcement towards others only.

Despite the approval of the validity of the guarantee right against third parties, the Jordanian legislator needed to indicate what is meant by third parties specifically. Also, the legislator did not indicate the authoritative extent of the registration towards others, as other legislations did. In addition, the buyer was not allowed to dispose of the sold item in a way that balances the interest of the seller, the buyer, and the interest of other.

The study addresses the previous problems to find solutions. The study does not recommend restricting the buyer's freedom and that the sold thing be transferred to a third party loaded with the condition of retaining ownership.

The research also recommends explicitly stipulating the seller's right to recover the sold item in the event of the buyer's failure to implement his obligation to pay the full price, in addition to immunizing the seller under the condition before the creditors of the insolvency procedures.