Ownership Transfer Systems in European Law

Consensual Transfer Systems

In a consensual transfer system, ownership passes the moment the contract of sale is made. The contract itself transfers ownership of the object to the buyer; this is also called the “solo consensus rule.”

French Law and the Solo Consensus Rule

In French law, the obligation to transfer an object is performed by the sole consensus between the contracting parties. It makes its creditor the owner and places the object at the latter’s risk the moment it ought to have been transferred, even if a transfer of possession has not taken place. This system differs from the Roman system and is based on moral relations between people. It is favorable to commerce because it does not need corporal delivery of the object; intent is enough.

English Law and Movable Property

English law does not have a unified transfer system; the rules applying to movables differ from those applying to immovables. Originally, the requirements of delivery applied to all transfers of movables. We have two exceptions when delivery is unnecessary: when the transfer is based on sale or when the transfer takes place by deed. Therefore, there are three ways of transferring title in movables:

• The original rule of delivery
• The newer rules on sale
• Transfer by deed

The default rule, which applies in the absence of the parties’ express or implicit intention, is contained in the Sale of Goods Act.

The Tradition System

Dutch Law and Roman Traditions

Dutch law follows the Roman transfer system, which required traditio; this approach is called the Tradition System (TS). The old rule from Roman law says that between contracting parties, from contracts, merely rights are born, but that ownership—especially against third parties—is acquired only through traditio or conveyance. In this way, the public interest, the certainty of possessions, and the security of moneylenders are safeguarded. It is clear and simple.

German Law and the Real Agreement

In German law, a separate legal act aimed specifically at transferring ownership is required: the real agreement. In the tradition system, on the one hand, there is the legal act that obliges the transfer of ownership; on the other hand, there is the subsequent legal act which effectuates the transfer.

Austrian Law: Titulus and Modus

Austrian law is based on the 17th-18th century theory of titulus and modus, requiring for every transfer of ownership a legal ground and an additional formality, such as delivery in the case of movable property. A contract itself does not pass ownership to the buyer.