Explanation of Article 346
The subject of this article pertains to the seller's right to retain the sold item until the price is fully paid. Article (340) stipulates that the buyer is obligated to pay the price before taking possession of the sold item. Consequently, the first paragraph of this article establishes that the seller has the right to retain the sold item until the due price is fully paid. The generality of the article covers whether the entire price or a part of it is due; thus, the seller has the right to retain the sold item until it is paid.
The price is considered due if the time of payment is either before or concurrent with the time of delivery of the sold item. This is applicable in two cases: The first case: If the price is due and the seller has not yet delivered the sold item to the buyer. This also includes situations where it was agreed that the price would be paid upon delivery of the sold item, and the buyer fails to pay. The second case: If the price is deferred to a time after the delivery of the sold item, and the time for delivery arrives before the due date, and the due date has lapsed for one of the reasons stated in the system, and the buyer has not paid the price. In this case, the seller is also entitled to retain the sold item until the price is paid.
If either of these cases is realized, the seller has the right to retain the sold item until the buyer pays the price. The provision of a pledge or guarantee by the buyer does not affect the seller's right to retain.
Conversely, the seller does not have the right to retain the sold item if the time for payment is deferred beyond the time of delivery and the due date for payment has not lapsed for any of the reasons stated in the system. Similarly, the seller does not need to retain the sold item if the time of delivery is after the time of payment, as the seller can demand payment from the buyer without delivering the sold item until the specified delivery time. However, if this time arrives and the buyer has not yet paid the price, the seller may retain the sold item until the price is paid.
The establishment of the seller's right to retain the sold item results in the application of the provisions of the right of retention as stated in articles (191-195), including the requirement for the retainer to preserve the retained item. The seller is required to exercise this level of care; if the item perishes without the seller's fault, the risk of loss falls on the buyer, as stated at the end of this paragraph. Although the default rule is that the risk of loss before delivery is on the seller, since the buyer is responsible for the non-delivery due to their fault, they bear the risk. However, if the loss occurs due to the seller's fault, the seller bears the risk, and the buyer may request the annulment of the sale with compensation according to general rules.
The second paragraph clarifies that the seller's right to retain is forfeited if they accept the deferment of the price, whether voluntarily by granting the buyer a period for payment or in response to the buyer's request for a deferment. The effect of forfeiting the seller's right to retain is that they are obliged to deliver the sold item to the buyer without linking it to the buyer's payment of the price. If the seller refuses, the buyer may demand delivery, and the risk of loss of the sold item in this case falls on the seller.
The deferment mentioned in this paragraph refers to the consensual deferment granted by the seller according to the explicit text of the article. Conversely, if the deferment for payment of the price is granted by the court as a respite or a reasonable deferment for an exceptional situation as provided in articles (209, 275), this deferment does not prevent the seller's right to retain the sold item until the deferment expires and the price is paid, even if the time of delivery precedes the expiration of the deferment. The deferment granted for payment of the price that prevents the right of retention must be a deferment granted by the seller to the buyer according to the explicit text of the second paragraph of the article. The deferment granted by the court to the buyer is not from the seller, and the seller's consent is not required for its granting. It is a deferment aimed at facilitating the buyer, not at depriving the seller of the right to retain the sold item until the price is paid.
Since the right to retain the sold item is a right established for the benefit of the seller and not a matter of public order, it is permissible to agree in the sale contract or any subsequent agreement to waive the seller's right to retain in the event of the buyer's non-payment of the price.
Related To
Article 346
-
A seller may retain possession of the sold item until he receives the due amount from the sale price, even if the buyer offers a pledge or surety. If such item is destroyed or damaged while in the possession of the seller, the buyer shall be liable therefor.
-
If the seller consents to the deferral of payment, he shall relinquish his right to retain possession of the sold item and shall deliver it to the buyer.