The Use of Property Rights to Secure Acquisition Credit

Abstract An examination of the use of property rights to secure acquisition credit across different legal systems reveals that the divide between civil law and common law traditions does not provide guidance in secured transactions law. Legal systems within the same tradition can have completely different rules regarding property rights that secure acquisition credit. German and Swiss laws provide an example from civil law jurisdictions, since they differ starkly in their rules and practices regarding retention of title. Furthermore, profound differences can also be observed in secured transactions law among common law jurisdictions. Whereas English law is based on formalism, US laws are characterized by functionalism as provided for in Article 9 of the Uniform Commercial Code. The United Nations Commission on International Trade Law Legislative Guide on Secured Transactions sheds light on another dimension of the problem and shows that functionalism can be implemented by a unitary or non-unitary approach. Examination of several legal systems and international instruments provides insights about a possible reform of the rules on property rights that secure acquisition credit.