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Conditional Sale Agreement Template for Germany

A German law-governed Conditional Sale Agreement (Kaufvertrag mit Eigentumsvorbehalt) is a legally binding contract where the seller retains ownership of goods until the full purchase price is paid, while allowing the buyer to take possession and use of the goods immediately. This agreement type is particularly common in German commercial practice and is governed by the German Civil Code (BGB), specifically §449 regarding retention of title. The document includes detailed provisions on payment terms, delivery conditions, risk transfer, and the seller's rights in case of default, all structured to comply with German legal requirements and commercial practices.

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What is a Conditional Sale Agreement?

The Conditional Sale Agreement is a crucial document in German commercial transactions where goods are sold with payment in installments. This agreement type provides security for sellers while allowing buyers to acquire and use goods before completing payment. Under German law, the retention of title (Eigentumsvorbehalt) is specifically recognized in §449 BGB and offers strong protection for sellers. The document is commonly used for high-value equipment sales, vehicle purchases, and industrial machinery transactions. It must comply with German mandatory laws, including consumer protection regulations where applicable, and typically includes detailed provisions on payment schedules, delivery terms, risk allocation, and enforcement rights. The agreement's structure reflects German legal requirements while accommodating commercial flexibility needed for various transaction types.

What sections should be included in a Conditional Sale Agreement?

1. Parties: Identification and details of the seller and buyer, including full legal names, addresses, and registration details if companies

2. Background: Context of the agreement and brief description of the transaction

3. Definitions: Definitions of key terms used throughout the agreement

4. Subject Matter of Sale: Detailed description of the goods being sold, including quantity, quality, and specifications

5. Purchase Price: Total purchase price, payment schedule, and payment methods

6. Retention of Title: Terms specifying that ownership remains with the seller until full payment, including provisions for default

7. Delivery and Risk: Terms regarding delivery of goods and transfer of risk

8. Seller's Warranties: Standard warranties regarding title, quality, and fitness for purpose

9. Default and Remedies: Consequences of payment default and seller's rights to repossess

10. Force Majeure: Provisions for unforeseen circumstances affecting contract performance

11. Governing Law: Specification of German law as governing law

12. Notices: How formal communications between parties should be made

13. Entire Agreement: Confirmation that this document represents the complete agreement between parties

What sections are optional to include in a Conditional Sale Agreement?

1. Installation: Required if the goods need professional installation or setup

2. Training: Include if seller must provide training for use of goods

3. Maintenance and Support: Include for technical equipment requiring ongoing support

4. Insurance Requirements: Include if specific insurance must be maintained by buyer

5. Export Controls: Required for goods subject to export restrictions

6. Data Protection: Include if personal data processing is involved

7. Consumer Protection Rights: Required for B2C transactions, including withdrawal rights

8. Intellectual Property: Include if software or proprietary technology is involved

What schedules should be included in a Conditional Sale Agreement?

1. Schedule 1 - Goods Specification: Detailed technical specifications of the goods

2. Schedule 2 - Payment Schedule: Detailed breakdown of payment installments and due dates

3. Schedule 3 - Delivery Schedule: Timeline and logistics for delivery if complex or multiple deliveries

4. Schedule 4 - Warranty Terms: Detailed warranty conditions and claim procedures

5. Appendix A - Form of Notice: Template for formal notices between parties

6. Appendix B - Acceptance Certificate: Form for confirming receipt and acceptance of goods

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Germany

Publisher

Ƶ

Document Type

Sales Contract

Sector

Sales

Cost

Free to use

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