Call-off Stock of goods
Note: Goods will not be separated from the bankruptcy estate
The so-called “call-off stock” of goods held at the customer’s or distributor’s premises is a common system used to facilitate sales.
Apparently, this is an estimating contract in which the supplier sends the products to the other party’s warehouse, where they remain the property of the seller.
Although this is the case theoretically, the practical reality is different. The retention of title, even if established in writing in the contract, seems like a substantial guarantee, but it will only be illusory in the event of the customer’s or distributor’s bankruptcy. In fact, Spanish Bankruptcy Law (Ley Concursal) integrates call-off stock into the bankruptcy estate of the bankrupt party.
It is irrelevant whether the owner of the goods reserved the right to approve or disapprove of the withdrawal by the customer/distributor.
In our opinion, the protection of the value of goods supplied in call-off stock (which should be distinguished from consignment stock) should be established in contractual clauses that impose certain obligations on the customer/distributor, who effectively controls the goods, to protect the company that entrusts them with the management of such goods.