Common use of Vendor’s Lien Clause in Contracts

Vendor’s Lien. 1. Delivered goods shall remain our property until all claims under the contract (including any bills receivable) are satisfied. This vendor’s lien shall also apply to all deliveries even if the buyer has made payments for parts or individual deliveries. 2. Inasmuch as the buyer’s assistance (e.g. registration) is necessary for effectiveness of our vendor’s lien, the buyer shall take the necessary steps for substantiation of and compliance with our rights. 3. If the buyer is in default of payment or does not honor a bill when due, we shall be entitled to take back the goods and enter the buyer’s business for this purpose. We shall only have these rights if the buyer has failed to fulfil his obligations even within a reasonable period of grace. Then we can interdict the disposal, processing, combination with other goods and removal of the delivered goods. 4. The buyer shall have the right, within a normal business relationship, to resell the goods delivered subject to the vendor’s lien. The pledge or assignment of relevant accounts receivable for the delivered goods shall not be permissible, however, until all obligations under the business relationship have been settled. 5. The buyer of goods subject to a vendor’s lien shall already cede his rights under the resale beforehand. This shall also apply to all further claims, in particular insurance claims resulting from the loss or damage of the goods. It shall further apply to goods that have been processed, reworked or mixed already. 6. The buyer shall have the right, within a normal business relationship, to collect such receivables for the goods that have been ceded to us and accepted by us already, also for so-called further claims. The right of collection may be revoked by us if the buyer breaches duties in relation to us, becomes insolvent, or our rights are at jeopardy due to the intervention of other creditors. 7. The buyer shall be obliged, at our request, to submit a special and written claim assignment to us as well as his buyer, from which the value of the resold goods as well as the name and address of the debtor are evident. 8. In the event of any foreclosure initiated by a third party against the goods delivered by us, the buyer shall inform us about this action immediately and provide us with all necessary documents, such as e.g. the attachment order and statutory declaration by the buyer or an authorized person, confirming that the goods to be attached are ours, and thus confirm that these were delivered subject to a vendor’s lien. 9. In the event of late payments, serious breaches of order and the law, in the case of foreclosure or insolvency against or of the buyer, we shall be entitled to demand the immediate surrender of such goods that have not been resold yet in order to keep them separate, as our claim appears to be in jeopardy. Upon any such demand for surrender, the buyer shall keep the goods separated from other goods, label them as our goods and refrain from disposing of them in any form whatsoever. An inventory list of our goods shall be provided. The buyer shall further be obliged, in the event of a sale to third parties, to refrain from any collection of the sales value and to request the debtor to make payments directly to us. In the case that payments are still received by our buyer, these shall be kept separate from his normal bank accounts and transferred to us immediately. 10. The buyer shall be obliged to keep the goods delivered by us sufficiently insured against fire, water damage, theft and damage by third parties, namely at his own costs, until complete payment. Records thereof shall be kept on request. Possible complaints against third parties or insurances for our goods shall be assigned to us. This assignment is herewith accepted in advance. The insurers or the involved third party shall only be informed at our request. 11. We herewith explicitly confirm that we shall limit the securities to be granted to us resp. the release of securities already received to 120% of our total claim at the buyer’s request, whereby the choice of securities shall be at our discretion.