Judgment of the Supreme Court of Justice of 20-03-2014 Standardization of Jurisprudence – Insolvency Proceedings  – Right of  Retention

The Supreme Court of Justice decided, through a  standardization of jurisprudence  judgment, about the following matter: with the conclusion of a promissory contract  without erga omnes effects, with a consumer to whom the asset covered by the  promissory contract has been delivered to  (traditio),  considering the promissoryseller is declared insolvent and the contract is breached, does the promissory-buyer  hold the right of retention?

Contradicting the view expressed by the Court of Appeal of Lisbon, the Supreme  Court of Justice standardized the Jurisprudence as follows: “In the context of  graduation of credits during insolvency, the consumer/promissory-buyer that is part  of the contract, even when in a situation of a contract with effects only between the  parties, if there is traditio and the deposit was duly paid, subject to the breach of  the contract by the insolvency administrator, holds the right of retention under the  terms provided in number 1, paragraph f) of article 755º of the Portuguese Civil  Code.”