The Purchase Option in Financial Leasing (Crédit-Bail) Contracts: Legal Mechanisms for the Transfer of Ownership to the Lessee

Financial leasing (crédit-bail) represents an important financing mechanism that enables economic actors to use productive assets while postponing ownership acquisition until the end of the contractual term.Originating in the United States in the early 1950s and subsequently expanding to Europe and other regions, financial leasing has become a widely adopted financial instrument in both developed and emerging economies.In Algeria, the legal framework governing financial leasing was formally introduced through Ordinance No. 96-09 of 10 January 1996, which established the regulatory foundations for leasing operations conducted by banks and specialized financial institutions.A distinctive feature of financial leasing contracts lies in the retention of ownership of the leased asset by the lessor throughout the duration of the contract.This mechanism provides the financing institution with an effective legal guarantee while enabling the lessee to use the asset for professional purposes in exchange for periodic payments.At the end of the contractual period, the lessee is generally granted three alternatives: renewing the lease, returning the asset, or exercising the option to purchase the asset at a predetermined residual value.This study focuses specifically on the purchase option, which constitutes the principal legal pathway through which the lessee may ultimately acquire ownership of the leased property.The article analyzes the legal conditions governing the exercise of this option and the procedural steps required to transfer ownership from the lessor to the lessee under Algerian law.Particular attention is given to the legislative framework established by Ordinance No. 96-09 and related regulations governing leasing transactions.By examining both the contractual structure of financial leasing and the legal mechanisms governing ownership transfer, the study aims to clarify the legal nature of the purchase option and its role in transforming a financing arrangement into a final acquisition of property.The analysis ultimately highlights the importance of financial leasing as a modern financing instrument while identifying areas where the legal and regulatory framework could be further strengthened to enhance legal certainty and investment security.