The Functions of the Dispositive Principle of Traditio – An Analysis of the Delivery Default Rule for Buyer Priority Over the Seller’s Creditors

Abstract The present analysis concerns what is here described as the dispositive principle of traditio, understood as a delivery-based default rule for buyer priority that may be modified through contractual arrangements allowing earlier buyer protection against the seller’s creditors. The analysis is limited to the issue of buyer priority in insolvency-related creditor conflicts and deliberately sets aside broader questions concerning transfer of ownership and ownership concepts as such. Adopting a functional and institutional perspective, the analysis examines how delivery-based and consensus-based systems operate in practice within credit relationships, financing structures and insolvency settings. The analysis suggests that the delivery default rule performs three central functions. First, it contributes to the optimisation of financing by allowing parties and creditors to allocate priority in ways adapted to the economic characteristics of different transactions. Secondly, it functions as a stable and adaptable default rule that fits the majority of transactions while permitting limited deviations where commercially justified. Thirdly, it contributes to reducing dispute costs by structuring legal uncertainty and incentivising parties to rely on relatively verifiable and predictable priority arrangements. The analysis further suggests that the persistence of delivery-based systems cannot be explained solely through doctrinal or conceptual structures concerning ownership and transfer. Rather, these systems must also be understood as embedded within broader institutional environments shaped by creditor behaviour, financing arrangements, monitoring structures and insolvency law. The analysis concludes that delivery-based systems may be understood not as rigid structures, but as institutional frameworks capable of combining stability with selective flexibility in response to differing transactional and financial circumstances.