Contract Clauses that Facilitate Debt Recovery

Effective recovery often begins long before a dispute arises, and well-drafted contracts can materially improve a creditor's position if payment difficulties occur. Particularly useful provisions under Spanish practice include jurisdiction and choice-of-law clauses, default-interest provisions, retention-of-title clauses (reserva de dominio), written acknowledgements of debt, valid notice provisions, personal guarantees and clauses allocating recovery costs.

Retention of title, in particular, can be opposed more effectively against third parties where it is documented and, where applicable, recorded. Businesses trading in or with Spain are well advised to review their contractual documentation periodically so as to strengthen their legal position and reduce recovery risk.

We review and draft B2B contract terms for trade with Spain, focusing on the clauses that most strengthen a creditor's position if a debt arises.