A comparative study of the condition of maintaining ownership and the basics of the possibility of protecting a third party in good faith in Iranian and British law

Taghipour,, , Mohammad Haoseein,, Taghipour,, , Mohammad Haoseein,; Arefali, Majid

doi:10.22034/jlvi.2025.2052369.1326

A comparative study of the condition of maintaining ownership and the basics of the possibility of protecting a third party in good faith in Iranian and British law

Document Type : Research/Original/Regular Article

Authors

taghipour,, , mohammad haoseein, taghipour,, , mohammad haoseein, ¹

majid arefali ²

¹ Assistant Professor, Department of Private Law, Faculty of Law and Political Science, University of Mazandaran, Babolsar, Iran

² PhD student in private law, Faculty of Law and Political Science, University of Mazandaran, Babolsar, Iran

10.22034/jlvi.2025.2052369.1326

Abstract

A contract of sale is inherently a translatory contract (conferring ownership); however, concerns regarding the collection of the consideration have inclined sellers to incorporate certain clauses, such as Retention of Title (ROT) or delayed transfer of ownership. Comparative studies indicate that while there is no doubt regarding the validity of such clauses under the UK Sale of Goods Act 1979—which in certain cases also protects uninformed third parties acting in good faith—their acceptance in Iranian law remains controversial, particularly when the subject matter is transferred to a bona fide third party. Utilizing a descriptive-analytical method, this research posits that considering the nature of such clauses in both Iranian and English law, and based on principles such as Good Faith and the necessity of Economic Efficiency, third-party transferees acting in good faith should be protected—a stance increasingly adopted by judicial precedent. Consequently, the original owner (the conditional transferor/obligee) should only be entitled to claim the equivalent or value of the property from their immediate transferee (the obligor), rather than reclaiming the asset from the bona fide third party.

Keywords

Retention of Title Clause

Delayed Transfer of Ownership

Suspension of Ownership Transfer

Bona Fide Third Party

Right of Lien