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Right of retention

The consequence of the ‘simultaneous performance’ principle, which generally applies to contracts binding on both parties, is that one party may withhold its own performance as long as the other party has not yet performed its obligation and is not offering to do so (defence of non-performance). Such a right of retention may also arise in connection with the obligation to surrender an item.

The party entitled to retention may refuse to surrender the property until an obligation owed to them has been fulfilled. Thus, the party obliged to surrender an item need only fulfil this obligation concurrently with the settlement of their claims for expenses incurred in relation to the item or for damage caused to them by that item. Rights of retention may be based on statutory, judicial or contractual grounds. They are treated in the same way as liens in both bankruptcy and composition proceedings and are therefore equivalent to a right of segregation.

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