Meaning
Legal provision granting a creditor the right to retain possession of a debtor’s movable property until an obligation is fulfilled. In cases where a logistics provider or repair facility holds hardware, chinese civil code article 447 allows the holder to keep the assets if the owner fails to pay for services rendered. The debt must be connected to the specific property being held.
Possession Priority
Physical control of the goods is the primary requirement for exercising this right. If a shipment of connectivity modules is already delivered to the buyer, chinese civil code article 447 no longer applies. The lien exists only as long as the creditor maintains custody.
Obligation Nexus
Debt and property must originate from the same legal relationship. A warehouse cannot hold current shipments of antennas for a debt incurred two years ago on a different product line. This restriction prevents the abuse of retention rights in ongoing commercial dealings.
Enforcement Protocol
Notice must be provided to the debtor before the property is sold to satisfy the debt. This period allows the manufacturer to settle the invoice and recover the components. Failure to pay within the notice period results in a public auction or private sale.
