Retention of Title Clause with Reference to Juristic Opinions and Iranian Positive Law

Abstract

In contemporary transactions, particularly installment sales, the retention of title clause has become widely used as a mechanism to secure the full payment of the purchase price by the buyer. Under this clause, the transfer of ownership of the goods (subject matter of the sale) is contingent upon the payment of all installments, and the seller remains the legal owner of the goods until such payment is completed. Although this clause holds a clear and established position in Western legal systems, it encounters certain challenges within Imami jurisprudence and Iranian positive law, particularly regarding its juristic validity and conformity with established legal principles. The objective of this study is to provide a juristic analysis of the retention of title clause based on both prominent and less prominent opinions of Imami jurists and to examine its compatibility with Iranian legal regulations and practices. The research method adopted in this article is descriptive–analytical, relying on library-based sources, including authoritative juristic texts, legal literature, and judicial precedents, to analyze and evaluate the subject. The findings indicate that although some jurists consider the suspension of ownership transfer to be problematic, it can be deemed legitimate and enforceable by invoking principles such as “believers are bound by their conditions” and the general permissibility of stipulations within binding contracts. From the perspective of Iranian law, based on the principle of freedom of contract (Article 10 of the Civil Code) and the binding nature of contractual stipulations (Article 219 of the Civil Code), this clause is acceptable and enforceable; however, its proper implementation requires careful drafting of contracts and clear articulation of the parties’ obligations.